Fund from international lenders drops in March

The government received 5% of the total estimates as the economy continued to recover from the coronavirus lockdowns

Despite the government’s estimated borrowing of Nu 6.08bn from international lenders in the form of program and project-tied borrowings, the amount received was about 5% of the total estimates.

This is according to the Budget Performance Report for the FY 2021-2022 of March-end released by the Department of National Budget (DNB), Ministry of Finance (MoF).

The report states that Nu 2.62bn has been received by the end of the third quarter, which is around 43% of the total estimates, while the amount received during the third quarter was about 5% of the total estimates.

However, the government estimated total borrowings of Nu 6.08bn from international lenders like the ADB, World Bank, IFAD, and JICA in the form of Program and Project-Tied borrowings.

As of the third quarter, the government received Nu 2.34bn from the ADB, Nu 163.63mn from the IDA and World Bank, and Nu 120.65mn from the IFAD.

An official from the MoF said that in the third quarter, the government didn’t receive any program-based borrowing fund and Nu 278mn was received for the government project-tied borrowings from international lenders.

According to the report, as a domestic borrowing, the outstanding T-bills stood at Nu 13,000mn at the beginning of the 3rd quarter.

In addition, the government has issued T-bills worth Nu 22,500mn to finance the resource gap which was determined by comparing the cash requirement submitted by the budgetary agencies against the actual cash available in the Government Consolidated Account.

Further, the cash raised through the issuance of T-bills was also used for redemption of the outstanding T-bills that were carried forward from the previous quarter. Nu 17,000mn worth of T-bills was redeemed leaving an outstanding T-bills of Nu 18,500mn at the end of the third quarter.

Meanwhile, the government’s overall resources have increased to Nu 3.84bn due to the incorporation of the external grants of Nu 3.77bn and internal receipt of Nu 66.647mn.

The report states that there has been a slight increase in the fiscal deficit from 8.59% to 8.85% of the Gross Domestic Product (GDP). It is mainly on account of the incorporation of activities financed through external borrowings amounting to Nu 525.283mn during the period.

The performance of total resources at the end of the third quarter stands at 54% against the estimates which is lower compared to the last FY which was about 84% during the same period.

Similarly, the performance of the domestic resource stands at 62% against the revised estimates which is also lower compared to the last FY which was 100% during the quarter.

The expenditure performance as compared to the revised budget stands at 53%, which is an increase of 5% as compared to the last FY 2020-21 which was about 48% during the same period.

“Having rolled out the booster dose for COVID-19 and further with the relentless efforts and timely interventions from the government, the implementation of the capital works is expected to pick up from the beginning of the next quarter onwards,” the official said.

The official added that with the successful completion of the Mid-Year Review of budget and Annual Performance Agreements, the budgetary agencies are expected to speed up the implementation of activities.

“The expenditure performance is expected to improve during the fourth quarter of the financial year,” the official said. 

Kinley Yonten from Thimphu