2024 RECURRENT BUDGET OVERVIEW

The 2024 Recurrent Budget, developed by the Ministry of Finance and Economic Development (MFED), outlines the Government of Kiribati's financial plan for sustaining essential public services and administrative operations throughout the fiscal year. Under the theme “Building a Secure and Prosperous Future,” the budget emphasizes prudent fiscal management while addressing emerging economic challenges.

Key Highlights:

• Civil Service Wage Adjustment: A significant 38% increase in civil service wages has been implemented to enhance public sector efficiency and stimulate domestic consumption.
• Fiscal Deficit Management: The fiscal deficit is projected to widen to 22% of GDP, primarily due to increased wage expenditures and a reduction in budget support from development partners.
• Revenue Equalization Reserve Fund (RERF) Utilization: To finance the deficit, a withdrawal of AUD 80 million (17% of GDP) from the RERF is planned, adhering to the revised withdrawal policy.
• Tax Reforms: Implementation of the new Income Tax Act and anticipated amendments to the Value-Added Tax (VAT) Act aim to enhance domestic revenue mobilization and reduce reliance on volatile income sources.
• Public Financial Management Enhancements: The rollout of Phase I of the Integrated Financial Management Information System (IFMIS) in July 2023 marks a significant step towards improved budget preparation, execution, and reporting.