The Finance Ministry has proposed the conversion of the amount overdrawn from the state's public bank account during the COVID-19 pandemic into a long-term bond
Some provisions of the Fiscal Responsibility Act were suspended in April 2020 in order to effectively manage state finances in response to the pandemic. In November 2021, the Parliament approved the continuation of the suspension until the end of this month.
A letter sent to the Parliament by Finance Minister Dr. Mohamed Shafeeq acknowledged that the situation described in Article 36 of the Fiscal Responsibility Act was no longer applicable, and requested to end the exemption from January 1, 2024, and restore the Act in full. The letter further said the government has decided to securitize the overdraft from the public bank account and convert it into a long-term bond.
“..As planned in the financing plan of the proposed budget for 2024, the state public bank account overdraft at the end of the exemption period will be collectively securitized and converted into a long-term bond issued by the Monetary Authority to the government,” the letter said.
The minister also noted that the country’s real GDP in 2022 is expected to surpass the level it was in 2019 before the COVID-19 pandemic.
