These measures should ensure that the budget deficit is kept in check. It is vitally important that more and more Government expenditure is directed towards capital expenditure. Unfortunately, so far this year capital expenditure has not kept pace with the budget but hopefully things will turn around in the next 4 months.
The Government has been able to fund most of its cashflow requirements through flotation of treasury bills and bonds in the domestic market. The increase in the liquidity in the banking system has meant that all of the government’s issues are fully subscribed mainly by institutional investors.