You recall Pada’s pretence of a “balanced budget” in 2020-21 , a travesty of fiscal reality, by treating the transfer of Rs60 bn from the Bank of Mauritius as budget revenue instead of budget financing. While many of us were arguing that this was a mockery of the facts and his fudging of the budget figures ran contrary to good practices on fiscal transparency and accountability, many of these very economists were commenting on Budget 2020-21 without even mentioning these tricky tricks, these fudging of figures by our Pada. (highlighted later by IMF in its Article IV report )
In this budget 2023-24, Pada succeeds in fooling them once more - excluding the expenditures from the Special Funds and the expenditures that are passed on as loans to CWA, the WMA and the Metro Express- by posting a budget deficit of -2.9% of GDP.
These confused economists, who cannot even work out the real budget deficit figures, are assuring us that “ Le Budget jette les bases pour contrer l’inflation” without any arguments to support it. How could they ! …..because they are themselves acknowledging that …“Il n'y a pas de mesures par rapport à la perte de valeur de la roupie”.
Our muddled economists seem to have also greedily gulped down unhesitantly the last variant of Pada’s flawed explanation on BoM’s money transferred to MIC .”Grace a ses interventions régulières sur le marché intérieur d’échanges au début de la pandémie dans le but d’assurer les conditions d’un développement économique ordonne et équilibre, la banque de Maurice a investi dans le MIC le produit en roupies de ses interventions, soit Rs 81 milliards.”(sic)
If they had really understood that “ the amount of Rs 81 billion transferred to MIC is the result of money creation by BoM, not the fictitious product of forex sales. “ ….they would not have bothered to query about … “…le minstre des finances n’a pas abordé la question des fonds octroyés par la Banque de Maurice et n'a pas fourni de précisions quant à un éventuel remboursement de ces sommes ."
Most of them -our confused economists- should have been concerned about the financing of the largesse or "la bous doux" measures of the budget given our elevated levels of budget deficit, public sector debt and Current Account deficit . No, they were praising Govt for its "revolutionary" (sic) tax reform” , glossing over the loss of revenue of Rs 3 bn with the abolition of Solidarity Levy.
As Sameer had commented earlier “Money printing, inflation and public debt have been the key steroids. This is not sustainable but worse, the long term potential growth of the economy has not really improved.”
Yes, dear incoherent economists, Inflation will not come down as long as government spending remains high. The budget deficit is reflected in the external deficit, which fuels the depreciation of the rupee and inflation. This situation will continue until our currency reserves are exhausted. We are already feeling the effects of our populist and irresponsible policies à la Père Noel- a chronic shortage of foreign currency (damaging for an International Financial Centre , digne de ce nom).
