Accounting and auditing firm Deloitte has described the government’s 4% real GDP growth target for 2025 as realistic and attainable, considering the 5.7% growth recorded in 2024.
However, the firm warns that the expected slowdown is largely due to the government’s fiscal tightening and aggressive expenditure cuts, which could limit the rollout of key policies and programs.
In its 2025 budget review, Deloitte stressed the need for the government to reverse the trend of high budget deficits, which averaged 7.5% between 2021 and 2024.
With the projected 3.1% deficit for 2025, Deloitte believes this signals fiscal prudence, a key requirement under the IMF Extended Credit Facility (ECF) program. The firm also supports the government’s cautious spending approach, noting that it could help restore investor confidence and macroeconomic stability.
Despite the need for spending cuts, Deloitte underscores the urgent need for government-led economic expansion to tackle rising unemployment. The firm commends plans to prioritize investments in high-growth sectors but cautions that achieving a balance between austerity and job creation will be challenging.
Given the moderate growth outlook, Deloitte advises that expectations regarding job creation in 2025 should be measured, as macroeconomic stability is the foundation for long-term sustainable growth.
One major concern Deloitte highlights is the rising debt and arrears in the energy sector, warning that a potential power crisis could derail the projected economic growth.
Since industry is expected to drive growth, ensuring sustainable and consistent power supply is crucial. Deloitte urges the government to swiftly engage key stakeholders and implement a clear roadmap to settle these debts to avoid disruptions that could slow economic progress.
