Prime
Govt current expenditure went up by Shs313b in June
Finance Minister Matia Kasaija. PHOTO/ FILE
The government's current expenditure went up by Shs313.74 in the last month of the fiscal year 2022/23, which indicates increased short-term expenditures.
Current expenditure refers to short-term spending that is fully expensed in the fiscal period in which it is incurred.
The Ministry of Finance, Planning and Economic Development said over the weekend in the performance of the economy macroeconomic policy department monthly report that preliminary data shows that government spending in June 2023 amounted to Shs3.974 trillion reflecting a 99.1 per cent performance rate for the month.
The Ministry of Finance said current expenditure amounted to Shs2.719 trillion against the target of Shs2.405 trillion while development expenditure amounted to Shs1.194 trillion against the planned Shs1.499 trillion
Overall, the government operations during the month of June 2023 resulted in an overall fiscal deficit of Shs178.12 billion which was lower than the anticipated deficit of Shs575.26 billion owing to higher than planned expenditure for the month.
Domestic Revenue collections during the month amounted to Shs3.725 trillion of which Shs3.645 trillion and Shs80.49 billion were tax revenue and non-tax revenue respectively registering an overall surplus of Shs489.82 billion.
“This performance was partly attributed to higher than planned domestic revenue collections where tax revenue registered a surplus of Shs722.58 billion. However, non-tax revenue registered a shortfall of Shs127.65 which was below the target of Shs198.46 billion. The shortfall in grants was mainly due to zero disbursements from the Global Fund,” said the Ministry of Finance, Planning and Economic Development.
There has been a general improvement in the level of economic activity as well as sentiments about economic and business conditions in the country over the last few months as shown by the high-frequency indicators.
About the real sector, the Ministry of Finance said the Composite Index of Economic Activity (CIEA) grew by 1.1 per cent from 154.62 in April 2023 to 156.36 in May 2023 compared to a contraction of 0.7 per cent recorded in April 2023.
Similarly, the Purchasing Managers’ Index (PMI) was recorded at 56.4 in June 2023 from 57.4 in May 2023 indicating an improvement in business conditions given that it was above the 50.0-mark threshold. This was mainly driven by the growth of output and new orders supported by improved customer demand.
“There was further improvement in positive sentiments about doing business in the Ugandan economy by businessmen and investors as illustrated by the Business Tendency Index recorded at 61.98 in June 2023 from 58.39 in May 2023. This continued optimism was shown by the index shooting to the 60s which was different from the usual,” the Ministry of Finance said.
The Ministry further explained that there is stability in the economy and Inflation continued to ease during the month of June 2023 declining to 4.9 per cent from 6.2 per cent recorded in May 2023. A reduction in Transport and fuel prices as well as a reduction in prices for food items such as maize flour, cassava flour, sweet potatoes and tomatoes contributed to this slowdown.
In the Financial Sector, the Ministry of Finance said during the period, the Uganda Shilling gained strength against the United States dollar during the month of June 2023 with an appreciation of 0.6 per cent.
The shilling traded at an average mid rate of Shs3707.79/US dollar compared to an average mid rate of Shs3729.55/US dollar due to increased disbursement of budget support loans, increase in revenue from exports and forex inflow in the month.
