Table 1: MRF Forecasts vs Outcomes: Public Expenditure/GDP
(per cent)
MRF Forecast
Outcome
86/87 87/88
88/89 89/90 90/91
85/86
16.5
86/87
16.5
16. 7
87/88
15.0
16.7
16.6
88/89
15.4
16.6
16.9
15.6
89/90
17.0
16.5
16.9
15.9
16.4
90/91
18.3
16.8 15.7
16.0 18.8
Note: GDP calendar year, Expenditure April-March.
Source: Budget Speech by Financial Secretary, Appendix A.
15.
Revenue projections are forecast on the basis of GDP growth. Items such such as fees and charges, fixed duties are assumed to
be adjusted to maintain a constant real yield whilst allowances
for income
taxation are assumed to be adjusted for
inflation.
based
16.
The 1990/91 and 1991/92 Medium range forecasts have differed somewhat from previous forecasts by showing an increased
average level of public expenditure to GDP over the
the forecast
period. Comparison of the four year MRF 1991/92-94/95 with the
previous four years shows that public expenditure is forecast to
rise by 3.3 per cent points of GDP (table 2). In part this is
consistent with budgetary criteria as 1.4 per cent of the increase is accounted for by capital expenditures which are increased infrastructural investment, primarily on the port and
airport development strategy. Nonetheless there are also increases in current expenditure (up 1.4 per cent GDP) and other public expenditures (up 0.5 per cent GDP). This suggests that the
over the direction of baseline expenditure have some
justification in the current MRF.