Gabriel Makhlouf urges Government against giveaway budget
Central Bank governor Gabriel Makhlouf has called on the new Minister for Finance Jack Chambers to stick the spending rule the Government set in 2021 – but has since repeatedly broken – in the upcoming budget, in order to avoid overheating the economy.
“Limiting net expenditure growth to the nominal trend growth rate of the economy, which at the time establishing the rule was estimated at 5 per cent by your Department, has the potential to be an appropriate and credible anchor for fiscal policy,” Mr Makhlouf said in his annual pre-budget letter to the Minister for Finance of the day. “It is important that the rule is complied with.
“These generally favourable conditions provide a good backdrop for attention to turn more decisively towards strengthening that economic growth potential. Budget 2025 and the medium-term direction for fiscal policy that Government must set are key to achieving this,” he said. The publication of the letter came as the Minister said on Thursday, eight days after he was appointed, that Budget 2025 will take place a week earlier than usual – though he denied that this was a signal that an early general election being planned. Then next election must be held by early March.
Gabriel-Makhlouf Jack-Chambers Budget
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