Govt braces for higher deficit and debt-to-GDP ratio due to global economic slowdown – Prof. Prasad

Anticipate an increase in Government expenditure resulting in an increased budget deficit and debt-to-GDP ratio as they will be focusing on adjusting to the expected global economic slowdown due to ongoing wars in other parts of the world.

Deputy Prime Minister and Minister for Finance, Professor Biman Prasad says the Iran-Israel war, the Ukraine war, and the Syrian war are global uncertainties that may have an impact on all the economies around the world and especially ours, which is a tourism-dominated economy.

He says what they did in the last budget was very good because they set a foundation and created the fiscal space.

Professor Prasad says even if the government has to increase the expenditure in this budget, as a domestic policy push to counter any adverse impact of the global economic slowdown, we are in a strong position.

Professor Prasad will deliver the 2025/2026 National Budget address at 10am Friday.