Why may the planned budget differ from the Actual budget OR. Why is it difficult to achieve a balanced budget?
- Presence inflationary tendencies in the economy which may lower the real value of 1ic planned government revenue hence a deficit budget.
- Occurrence of unforeseen circumstances in the economy e.g. famine, floods, drought, epidemics which may end up increasing government expenditure.
- Failure to raise the planned financial resources in form of loans, grants, in a given financial year.
- Mismanagement, corruption and embezzlement of the planned funds may lead to a deficit budget.
- Improvement in the economic performance which may help the government to raise more revenue than what is expected hence a surplus
- External influence from international organizations, for example IMF which may force the government to change its budget before the end of the financial period e.g. in case the government is not using the borrowed funds for the intended
- Existence political instabilities and insecurity in the country which may force the government to increase expenditure so as to facilitate and maintain the security of the
CATEGORIES Economics
TAGS Dr. Bbosa Science
