The government expects to spend $309 billion, or approximately 56 per cent of overall expenditure, on debt repayment and interest charges this fiscal year, according to the Budget numbers released yesterday.

The overall Budget, at $547.74 billion, is in normal terms $39.77 billion, or 7.8 per cent more than the revised expenditure for the fiscal year that ended on March 31.

However, when inflation - estimated at an annualised 12.5 per cent for the fiscal year - is taken into account, there would be a real decline in the Budget of about five per cent.

Debt servicing

Based on Government's estimates, debt servicing will cost $41 billion, more than the $268 billion paid out in interest and capital during the fiscal year just ended on March 31.

Expectedly, the larger portion of the debt payments, $159 billion, or 57 per cent of the amount set aside, will be for interest costs. That is $34.9 billion, or 28 per cent higher than what was actually spent in the previous fiscal year.

Capital payments, projected this fiscal year at $150 billion, will be $21 billion or a fifth more than last year's total.

Last year, 53 per cent of the total Budget was consumed by debt servicing and repayments.

The debt stock up to January, the last published figures, was recorded at $1.16 trillion.

Finance Minister Audley Shaw will outline in Parliament April 23 his strategies for financing the Budget, including new borrowings.

business@gleanerjm.com