The fiscal deficit should decline to 1.8% of Gross Domestic Product (GDP) by the end of this year, according to the
"The 2027-2030 Multiannual Macroeconomic Framework contains the current fiscal path, under which the fiscal deficit in 2026 should reach 1.8% of GDP, below the level recorded in 2025 (2.2% of GDP). Meanwhile, in 2027, the fiscal deficit should decline to 1.4% of GDP," the MEF stated.
"For the 2028-2030 period, the fiscal deficit would stand at 1% of Gross Domestic Product (GDP). During that period, fiscal revenue would record average real growth of 3.4% and average 19.1% of GDP," it added.
The 2027-2030 Multiannual Macroeconomic Framework also considers the MEF's concern regarding the pressure that measures approved by the Legislative Branch between 2021 and 2025 would place on public finances.
During that period, high-fiscal-impact spending initiatives and tax measures were approved.
"In this context, lower fiscal revenue and greater spending pressures could keep fiscal deficits at high levels and generate a sustained increase in public debt," the MEF stated.
"This dynamic would have negative effects on economic growth and the population's well-being by reducing the fiscal response capacity in the face of adverse scenarios and raising financing costs, thereby limiting the resources available for investment and job creation," it added.
The MEF indicated that, given the fiscal situation it found, the Government will work to improve the efficiency of public spending, with an emphasis on public procurement and investment.
To this end, the creation of a commission aimed at improving their quality and reducing unfinished projects has been announced.
Similarly, actions will be promoted to reduce spending rigidity.
"On the revenue side, actions against tax evasion and avoidance will be strengthened, and the tax administration will be reinforced to permanently increase fiscal revenue. To this end, a commission will be created to improve tax compliance and modernize the tax administration without raising tax rates. In addition, the framework for tax benefits will be refined to protect the tax base and strengthen revenue collection," the MMM indicated.
"In parallel, efforts will be made to comprehensively strengthen the macrofiscal framework, including fiscal rules, while seeking to avoid compromising the country's fiscal sustainability and solvency over time. Thus, among the measures, a new fiscal convergence path will be established by law to provide greater credibility to fiscal policy and anchor the expectations of economic agents, while preserving prudent and sustainable levels of public debt at all times," it stated.
The MEF noted that, in the current context of multiple domestic and international risks, keeping public debt at prudent levels is essential for the State to be able to respond to adverse situations and maintain access to low interest rates in capital markets, thereby promoting investment, growth, and employment.
"In this regard, the 2027-2030 Multiannual Macroeconomic Framework emphasizes the importance of improving public spending quality and efficiency so that these fiscal strengths can effectively translate into greater economic growth and the well-being of citizens," it pointed out.
"Conversely, the persistence of fiscal imbalances would lead to an upward trajectory in public debt, higher interest rates, and a reduced capacity of the State to respond, with adverse effects on investment, economic growth, and the population's well-being," the 2027-2030 Multiannual Macroeconomic Framework said.
(END) NDP/CNA/MVB