2027 Budget Must Align Fiscal Expenditure with External Sector Growth 📈

• Macroeconomic Outlook: The Government presents the 2027 Budget on 12 November under IMF guidelines. While the Treasury holds excessive savings, the external sector faces projected deficits of US$ 534 Mn in 2026 and continued pressure in 2027 due to fuel imports and rising private credit. • Key Challenge: Uncoordinated fiscal expansion combined with private credit expansion Risks driving import demand for consumer goods and vehicles, intensifying balance-of-payments pressures. • Strategic Expenditure Focus: • Immediate Recovery: Funding essential public services, targeted welfare, and infrastructure rehabilitation. • Import Reduction: Boosting agricultural productivity, renewable energy, domestic intermediate goods, and industrial tech. • FX Generation: Investing in export infrastructure, tourism development, ICT/BPM and tech exports, industrial zones, R&D, and port logistics. • Policy Recommendation: Shift from mere primary surplus targets to an External-Sector-Compatible Fiscal Expenditure Framework. Priorities should align with high-tech diversification—such as solid-state battery technology—to build domestic productive capacity and export capability while managing debt obligations.