The downside risks arise from the possibility of a sharp reversal in the terms of trade with oil prices falling well below $ as well as the inability of the central government to keep the reins on the transfers and subsidies element of the budget – especially transfers to public enterprises and utilities.
Preliminary estimates show that transfers are projected to rise from 7.8 per cent of GDP in fiscal 1998/1999 to 9.2 per cent in the current fiscal year.