Pursuant to Section 14 (3) (b) of the Fiscal Responsibility Act (No. 29 of 2015) and Section 12 (3) (b) of the Fiscal Resilience Act (No. 11 of 2023), the Fiscal Resilience Oversight Committee (FROC), submitted, on 28 March 2024, its 2023 Annual Report to the Clerk of Parliament for onward transmission to the Honourable Leo Cato, Speaker of the House of Representatives and Chairman of the Committee of Privileges.
The fiscal responsibility/resilience legislation provides a framework for Government’s adherence to fiscal discipline, transparency and accountability in Government’s financial transactions, and fiscal and debt sustainability. The Fiscal Resilience Oversight Committee, established under these Acts of Parliament, is mandated to monitor, and report to the House of Representatives on the compliance of Government with the provisions of the legislation. The findings are outlined in the FROC 2023 Annual Report.
The Annual Report commences with the economic developments in 2023, highlighting the estimated economic growth rate of 5.5%, influenced primarily by the recovery in tourism and growth in construction. Higher imports associated with the expansion in the service-oriented sectors contributed to a widening of the merchandise trade deficit. Foreign exchange earnings from tourism, inflows from the Citizenship by Investment Programme and foreign direct investment contributed to financing the merchandise trade transactions. Central Government fiscal performance was favourable, and the financial system remained stable. Inflation eased and the rate of unemployment declined. Economic growth and Central Government finances are projected to moderate over the medium-term.
The Fiscal Responsibility Act was the framework for assessing government’s fiscal operations in 2023, during which the Central Government complied with the real growth in primary expenditure, the wage bill, the primary balance and the liabilities of public-private-partnerships. The debt to GDP ratio was above the targeted 55% of GDP. Over the medium-term (2024-2026), the operations of the Central Government are projected to comply with the Fiscal Resilience Act, which became effective from 1 January 2024, for the wage bill and the primary balance. The debt target of 60% of GDP is to be achieved by 2035.
In 2023, the Government sought to improve fiscal transparency. Most of the fiscal and debt reports were published as stipulated in the legislation, and there were some elements of improvements in the consistency and comprehensiveness of the published fiscal and debt reports. The lack of audited public accounts, which have not been presented to Parliament since 2016, is a breach in the system for oversight and accountability.
The FROC offered recommendations for further refinement of the Fiscal Resilience Act, improving fiscal transparency and for supporting economic growth and transformation.
The FROC 2023 Annual Report and the FROC 2023 Annual Report at A Glance can be sourced from the website of the Ministry of Finance. The FROC will be answering questions on the Annual Report and fiscal and debt matters that are under the ambit of the FROC at a Press Conference scheduled to be held virtually, via the Government Information Services platform, at 10 am on Tuesday, 23 April 2024.
For further information contact the FROC via email at [email protected] or telephone 1 473 458 8085 or through our PO Box 3477.
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