What is Fiscal Space?

The Department of Budget and Management (DBM) defines fiscal space as the available funding that the government could use for its priority programs.

Fiscal space is computed as the difference between projected obligations ceilings (after considering projected revenues and deficit targets) and forward estimates of the cost of ongoing programs.

The President and the Cabinet will lead the setting of the strategic direction and distribution of the unallocated fiscal space, allowing the better assessment of trade-offs and opportunities. If fiscal space is limited or negative, decisions may need to be taken to reduce activities and limit spending on new projects. [DBM]

[Read: What are Forward Estimates?]

Source: Department of Budget and Management