Only a few countries were able to withstand the shock of COVID-19 on aggregate annual budgets. Most countries found it necessary to finance substantial emergency spending and additional investments to address the impact of the pandemic. This impacted on the direction of the average deviation between actual and planned budgets, that changed from underspending to exceeding the original approved budget, as presented below in percentages.

Success in achieving low deviation between approved and executed expenditure varies considerably across countries with different income levels and regions. Analyzing the average percentage deviations by country income levels it is apparent that in high income countries, budgets were over-executed and the deviations were higher, while in lower-income countries they were under-executed. The responses to COVID-19 resulted in higher deviations across all groups.

Comparison of 2021-2022 (post-pandemic) and 2015-19 (pre-pandemic) reveals that budget deviations were lower in the pre-COVID period in most regions except Latin America and the Caribbean, and Sub-Saharan Africa. The graph below shows that the percentage of countries with budget deviations of less than 5% in Central Asia and Southern Asia declined from 46.2% in the pre-pandemic era to 30.8% post-pandemic. In Europe, the proportion of countries with a deviation below 5% plummeted from 69.2% prior to COVID-19 to 28.9% after 2019. 

The monitoring of SDG indicator 16.6.1 is based on the annually collected data by PEFA Secretariat in cooperation with the WBG, the PEFA Partners and other institutions . The data is reviewed and updated  constantly to ensure the quality, consistency, and currency of information and submitted to UN.  The progress in countries' coverage since the beginning of the project is presented on the graph below.

It is considered that monitoring SDG indicator 16.6.1 will:

• Show the progress of the countries’ PFM performance that will support the SDG-16;

• Prove that the governmental budgets are realistic and implemented as intended;

• Give a highlight of the results of the PFM systems in terms of actual revenues, expenditures and fiscal deficit by comparing them to the original plans and approved budget;

• Help to monitor the progress in strengthening the PFM systems and planning reforms.

Information from PEFA reports and analysis of the budget credibility data indicates that:

• Better budget execution performance, closer to the planned one, relates to better revenue execution;

• Inclusion of all activities of central governments in budgets and financial reports leads to more predictable disbursement of resources;

• Better internal controls on non-salary expenditures bring more effective management of financial data and stronger external audit systems.