The African Development Bank (AfDB) has outlined that  African Economic Outlook 2020, that Treasury’s plan to reduce the fiscal deficit to 2.5% of gross domestic product (GDP) this fiscal year, is unrealistic.

In the 2019/20 National Budget, the overall deficit was projected to be 2.5% of GDP. However, AfDB acknowledges that economic growth could be reinforced by continuing macroeconomic stability. maintaining accommodative policy could propel capital flows, increase economic activity and restore growth since it supports credit to the private sector.

In 2018, the (former) Minister of Finance, Economic Planning and Development Goodall Gondwe said the 2018/19 financial year deficit could worsen if the World Bank fails to commit its financial pledge. The fiscal year (FY) 2018/19 deficit is expected to stand at 6.4% of gross domestic product (GDP), lower than the previous year (7.8% of GDP) but higher than budgeted (3.8% of GDP). Despite missing its target, the expected deficit demonstrates progress over FY2017/18, particularly for an election year. In the 2019/20 National Budget, the overall deficit is projected at K155.9 billion or 2.5% of GDP, which is a drop from last fiscal year’s K320.2 billion or 6.5 percent of GDP.