Gov’t beats FY2021-2022 budget deficit target -preliminary figures: The budget deficit narrowed to 6.1% of GDP in FY2021-2022 from 7.4% the year before, according to preliminary figures released by Ittihadiya yesterday.

This is significantly smaller than the 6.7% target in the state budget, and comes despite surging food and energy prices adding bns of USD in unexpected costs during the second half of the year.

Remember: GDP is likely to have grown at a faster than expected rate last year. The most recent government forecast has growth coming in at 6.2%, above the initial 5.4% prediction in the budget, helping to explain how the deficit figure fell so far beyond the original target. Ittihadiya did not include a preliminary full-year GDP figure in the statement.

The primary surplus fell to 1.3% of GDP during the year from 1.5% in FY 2020-2021, according to the statement. The government had initially targeted a 1.5% surplus last year. This marks the fourth consecutive year during which the state recorded a primary surplus.

Debt servicing costs as a percentage of GDP fell to 32.8% from 35.8% the year before. A debt-to-GDP figure for the full year wasn’t provided.

Going forward: The government is targeting a 6.1% budget deficit and a 1.5% primary surplus in the current fiscal year. It wants to bring the budget deficit down to 5.0% and achieve a 2.0% primary surplus over the next four years.