By Ruth Nyirenda:
Government has unveiled an ambitious 2026/27 National Budget aimed at restoring macroeconomic stability, reducing public debt and stimulating production in key sectors of the economy.
The fiscal plan projects total expenditure at K10.978 trillion, representing 34.8 percent of Gross Domestic Product (GDP), with the economy expected to grow by 4.1 percent.
End-period inflation is estimated at 15 percent, nominal GDP at K31.5 trillion, and the policy rate at 18 percent— indicators that frame the administration’s recovery strategy.
Presenting the budget in Parliament on Friday, Minister of Finance and Economic Planning Joseph Mwanamvekha said the government will reduce the fiscal deficit from 11.9 percent to 9.0 percent of GDP, signalling a shift toward fiscal consolidation.
The move is expected to curb excessive borrowing, ease pressure on domestic interest rates and restore investor confidence.
Of the total expenditure, K7.581 trillion (69.1 percent) has been allocated to recurrent expenditure, while K3.397 trillion (30.9 percent) is earmarked for development projects. Analysts say increased development spending could stimulate infrastructure growth, support agriculture, manufacturing and small-to-medium enterprises, and create employment opportunities.
Statutory expenditure is projected at K5.092 trillion, equivalent to 78.9 percent of domestic revenue, down from 97.5 percent in the previous year — a development viewed as gradual improvement in expenditure flexibility.
The budget also allocates K1.923 trillion to wages and salaries, an increase of K288 billion, alongside K296 billion for pensions and gratuities.
Government aims to reduce gratuity payment waiting periods to at least three months, a move expected to inject liquidity into households and support consumption.
In addition, the fiscal plan prioritises export promotion and import substitution strategies to improve foreign exchange generation and strengthen the Balance of Payments.
Coupled with debt restructuring initiatives, these measures are intended to create fiscal space and enhance long-term sustainability.
Economic analysts Chindikani Sichinga noted that while inflation remains high, disciplined implementation of deficit reduction, efficient public spending and growth in productive sectors could gradually stabilise the economy, lower borrowing pressures and lay the foundation for sustainable recovery.
He said wirh the reduced policy rate,investment sector will grow
