Lichfields UK’s Post

July 31, 2024 *Fiscal and monetary policy coordination* The government's fiscal deficit was least of a drag on national savings in FY24, in fact, the lowest since FY18. The lower burden of the government left more of the national savings to be used for investments. The private sector, however, did not utilize this space, while the government sector also curtailed its investments. Theoretically, when savings are lower than investment a current account deficit arises (refer attached table). As this gap reduced in FY24, the current account deficit also reduced to its lowest level since FY12. Going into FY25, the government is expecting private sector to increase its investments, with the assumption that government deficit will remain curtailed, while allowing some space for increase in savings investment gap and the resultant current account deficit on the external account. Considering the availability of this space, the SBP is also comfortable in reducing policy rate.

Cogent budgeting is all about achieving objectives and bringing in innovation. This is what the Budget does when handling the fiscal deficit. A view in Financial express today. https://lnkd.in/dZBdiRiR

The caretaker government's fiscal performance is remarkable in terms of achieving the revenue targets. #inp #independentnewspakistan #inp_wealthpk #revenue Read Article, click on ⬇️ link

In the newly published Spring Budget, there were three key areas announced that we identified in our submission. These are all focused on continuing to deliver growth. Alongside growth, we support the supporting of businesses and households, all key priorities for the financial services industry.  1️⃣ The introduction of a UK ISA.  What we know about this outcome is that it is a scheme focusing on channelling investment into British equities and will allow for an additional £5,000 to be saved on top of the current ISA allowance. The design and implementation will be consulted on via HM Treasury in a consultation ending in June 2024: https://lnkd.in/ehJ94Tz8    2⃣ Engaging industry on a digital gilt. Engaging industry on a digital gilt. A digital gilt will demonstrate HM Government’s confidence in Distributed Ledger Technology and the UK's desire to be a global leader in the digital assets landscape.    3⃣ The continuation of the Recovery Loan Scheme. This scheme helps SMEs access funding. In our submission we advocated for the Government to continue the Recovery Loan Scheme which was due to expire at the end of June 2024. We were pleased to see the scheme will be continued for a further two years until the end of March 2026 and renamed the Growth Guarantee Scheme https://lnkd.in/eueTK3XC     ▶ To read our Budget submission in full: https://lnkd.in/erKXEM6Z.      ▶ To read our response to the Spring Budget announcement: https://lnkd.in/eaf6weYa. #UKFinance #SpringBudget #Chancellor #SME #ISA #Growth  

Just before the end of fiscal year 2025, debt servicing budgeted at Rs. 9,775 billion would certainly be revised upward, and FBR’s target fixed at Rs. 12,370 billion downward. This is the well-known, long-practiced and well-designed modus operandi of the crafty bureaucrats sitting in the MoF to understate the expenditure and overstate the tax revenues. If this is called prudent budget making, then what can be a more apt example of perpetual insanity! https://lnkd.in/dzSMFPVh

The RBA is running a fine line between trying to manage inflation and other key economic indicators but at what cost? The government is not doing much on the fiscal policy side except hoping that they have money to splash at the May budget and save their first term. But businesses are still doing it tough as can be seen from the latest Peter Switzer article. How is your business doing? https://lnkd.in/gAHp6igG

The shift from targeting a single fiscal deficit number to reducing the outstanding stock of debt as a percentage of GDP is promising. The next step should be to articulate a glide path for debt to GDP ratio through amendments to the FRBM Act. This alongside a discussion on budget maths in this article with Rachna Sharma for ThePrint.

ON TODAY @11AM. Is the Federal Budget stimulatory or neutral when it comes to inflation? And what does this mean for future rate cuts (or even rises)? Join Phil Quinlan, Anthony Landahl, Mortgage and Finance Broker, Sascha Moore & myself as we discuss key priorities in this budget and what the government is trying to achieve, the cost of living relief measures, the outlook for the housing market, business-focused initiatives, tax updates and relief for mid-market businesses and how the government is viewing deficits and where the economy is expected to move over the next few years KPMG Aquamore Finance Equilibria Finance

[READ] BLSA commends Finance Minister Enoch Godongwana on a solid budget delivered with strained resources, striking a good balance between fiscal discipline and directing revenue to areas that will boost economic growth over the long term. BLSA believes National Treasury has prioritised the most important areas to address the deficiencies in our network industries. While there is nothing dramatic or new in this MTBPS, BLSA looks forward to the February budget for more detail particularly for facilitating PPPs, which is needed to accelerate the important infrastructure development needed to establish a strong foundation for future economic growth. https://lnkd.in/dsNWvEqQ

Headline in UK Finance post early this morning 'Government borrowing increased in July to the highest level in that month since 2021, data from the Office for National Statistics (ONS) has shown. Borrowing was £3.1 billion last month, £1.1 billion higher than what most economists had predicted. This will feed into tax and spending decisions the chancellor will be considering ahead of the autumn Budget. The ONS noted that the increase in public sector spending was largely due to inflation, with the cost of inflation-linked benefits rising alongside higher pay for public sector workers. The figure means that borrowing in the financial year so far has totalled £51.4 billion, the fourth highest year-to-July figure since 1993. Selected text is © UK Finance, 2024. All Rights Reserved. Graphic is © Mark S. Mandula, CLO BCR Learning, 2024. All Rights Reserved.