Adam I, Editor
SOUTH ALLURIA – A short while ago, the Ministry of Finance published its annual reports following the end of the Adammic financial year on Saturday. The figures showed a budget deficit larger than anticipated, and, worryingly, a huge recession which has crippled the Adammic economy.
Financial reports for the year have been published.
The Treasury has been producing its annual statements at the start of October since 2014, but this is the first year that they have been consolidated with the economic data to produce one single document, being called the Treasury and Economic Reports. The Budget for the financial year, approved by the Ruling Council last October, had planned to run a deliberate deficit, in order to reduce the level of unspent reserves in the Treasury. With revenues predicted at around £70, expenditure of £100 had been approved in order to run a deficit of £30. However, due to the logistical issues involved with the Emperor living away from home in Birmingham, over £20 worth of Contributions went unpaid, and they were recently written off by the Cabinet following a mix-up where many in the government had believed that the Contributions Scheme had been suspended months previously. As a result, government revenue for the 2016-17 financial year was £50.32, against expenses of £95, giving a deficit of £44.68. This brought Treasury reserves from £85 this time last year to £40.32 now. Whilst this is lower than expected, this shouldn’t be a cause for alarm. The next government will likely cut public spending in its Budget and allow reserves to build back up a little. However, the report does note that future revenues are currently uncertain, with a poor economy yielding low taxes and the fate of the Contributions Scheme undecided. The backdrop of the ongoing transition of central government from Yorkshire to Birmingham is likely to cause some upheaval in the public finances going forward.
Graph of the GDP throughout Adammia’s history, with the recent collapse clearly visible.
Far more eye-catching is the news regarding the economy, which is far from optimistic. A number of factors conspired to yield a massive recession: unpaid Contributions as already mentioned, Maker Studios terminating its contract with AB Animation Ltd., Top Hat Software being unable to find new commissions, and reduced wine and newspaper sales. The GDP plummeted from £118.95 last year to just £50.58 now, representing a recession of 57.48%.
The only glimmer of hope was from new company Adammic Investment Ltd., a subsidiary of Emperor Adam I’s Imperial Holdings group; their initial investments have reportedly earned impressive capital gains, although they have been largely offset by the overheads involved in setting up the investment fund’s portfolio (in particular, the brokerage transaction fees and stamp duty). The company is adopting a buy-and-hold strategy in order to reduce overheads from transaction fees, so if their investments continue to perform well on the stock market, they could soon start to become a major player within the Adammic economy. Recently, the Emperor provided an additional £120 of equity to the fund, which was invested in ETF tracker funds for the Euro Stoxx 50 and Standard & Poor 500 indices.
Once the new government in Birmingham has been assembled, it will already have its first challenge in front of it – how to get the economy moving again. The MoF report notes that the transition could provide both opportunities and problems, and advises ministers to think carefully. Much is uncertain at this point in time, but things can’t get much worse than they are currently, so no doubt many will be tempted to believe that an economic recovery is inevitable.
Despite the economic hardship, unemployment is actually down, and is now at 15.6%. This is mostly due to an influx of new citizens in North Alluria who are either enlisted in the Military or, in some cases, involved in Alluria’s civil administration. The National Employment Agency also updated its definitions so that being a member of the Ruling Council counts as employment in its own right.
The report can be read in full here.