What you need to know:
The spending resulted into a 79.6 percent performance, mainly driven by lower than planned spending under recurrent expenditure and development expenditure.
Government’s expenditure in August 2022 amounted to Shs2.602 trillion, representing a 79.6 percent performance rate against the planned expenditure of Shs3.268 trillion.
Government spending is an important policy tool for countries of all income levels. Relative to other countries, low-income countries (LICs) however, have specific features and needs that may shape the macroeconomic effects of fiscal policy in a particular way.
The Ministry of Finance, explains in the performance of the economy report of August 2022, that this performance was mainly driven by lower than planned spending under recurrent expenditure, development expenditure, categories during the month except interest payments.
This implies that the government spending during the month was low by Shs666.41 billion, reflecting the current difficult economic times characterised by high cost of living amidst increased inflation.
The report further shows that wages and salary payments during the month amounted to Shs591.45 billion, representing a 113.8 percent performance rate against the Shs519.93 billion target. This performance was due to late salary payments by some MDAs as some of the salaries meant to be paid in July were paid in August 2022.
“Similarly, Shs327.8 billion went towards clearing arrears during the month. Of this, Shs248 billion was war reparations payments made to the Democratic Republic of Congo at the end of the month,” said the Ministry of Finance.
Preliminary data indicates that government operations in August 2022 resulted in an overall fiscal deficit of Shs711.08 billion. This was lower than the planned deficit of Shs1.250 trillion on account of lower than planned government spending during the month.
Total revenue and grants during the month amounted to Shs1.891 trillion, against the planned Shs2.018 trillion.