UK budget deficit comes in above target, set to surge due to COVID (Adds details, background) LONDON, Britain’s government wentslightly over its budget deficit target for the recently ended2019/20 financial year which is likely to be dwarfed soon by asurge in public borrowing to soften the economic hit of thecoronavirus shutdown.The Office for National Statistics said on Thursday thatborrowing between April last year and March this year stood at48.7 billion pounds ($60.2 billion), compared with the mostrecent estimate of 47.4 billion pounds by the country’s budgetforecasters.That was 9.3 billion pounds higher than in the 2018/19financial year and equivalent to 2.2% of gross domestic product.The Office for Budget Responsibility, which producesBritain’s official economic forecasts, last week said the budgetdeficit could surge to 14% of GDP in the 2020/21 financial yeardue to the coronavirus shutdown.”The full effects of COVID-19 on the public finances willbecome clearer in the coming months,” the ONS said as itpublished Thursday’s data.”This means that some of the statistics included in thisrelease will be prone to larger revisions than normal, once moredata become available.” In March alone, the deficit – excluding state-controlledbanks – stood at 3.05 billion pounds, higher than a medianforecast in a Reuters poll for a 2.35 billion-pound shortfall.
Value-added tax receipts fell, reflecting the government’sdecision to allow companies to defer VAT payments as the crisisescalated and less spending by households.The ONS also said the figures did not yet show additionalhealthcare spending.First Published: 2020-04-23 08:08:48 Updated 2020-04-23 08:25:35
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