Stockbroker Analysis Outlines Structural Deficits and Financing Pressures in State Budget

An analysis by a stockbroker highlights structural imbalances in the budget, pointing to a significant financing need driven by debt maturities and heavy reliance on domestic borrowing.

A detailed assessment of the state budget by a stockbroker highlights a persistent structural imbalance, projecting total revenues of 54.28 billion dinars against expenditures of 68.895 billion dinars. The resulting budget deficit, estimated between 8.5% and 9% of GDP, demonstrates that anticipated tax revenues of 49.6 billion dinars will fall short of covering operational and investment spending.

Beyond the primary deficit, the analysis identifies a critical treasury financing requirement reaching 28.122 billion dinars. This figure significantly exceeds the annual budget deficit because it incorporates the roll-over of maturing debt principals, requiring the government to secure substantial capital primarily to honor past obligations rather than new investments.

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The structural composition of this required financing underscores a heavy reliance on domestic borrowing, which accounts for 19.845 billion dinars or more than 70% of the total need. Such a heavy draw on national savings through the banking system risks creating a crowding-out effect that could restrict credit availability for private businesses and households.

Meanwhile, external borrowing is projected at 6.877 billion dinars, pointing to potential difficulties in accessing international capital markets or a reliance on conditional bilateral and multilateral financing. Treasury resources provide a limited additional margin of 1.4 billion dinars to manage liquidity pressures throughout the year.

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