The revised 2010 Budget proved to be just a housekeeping exercise to contain the Budget deficit to within 3.5% of GDP.
Expenditure cuts of $75 million are to be made to attain this objective, apparently on advice from the IMF, although in a statement released in May the Fund had “advised a reduction in the Budget deficit to about 2% of GDP in 2010”.
The administration has been lobbying hard for a possible IMF-supported programme for a stand-by arrangement. But IMF has its own conditionalities which would prove to be unpalatable and unpopular as far as the people are concerned.
Contrary to widespread speculation that taxes may be increased to raise more revenue, the finance Ministry seems to have given a temporary reprieve to the people while the idea is very much alive for implementation later if the situation does not improve.