Sri Lanka budget deficit narrows up to May: CB official

ECONOMYNEXT – Sri Lanka’s budget deficit has narrowed to 2.7 percent of estimated gross domestic product for 2016, down from 2.7 percent a year earlier, an official said.

The central bank’s Director of Economic Research K M M Siriwardana said total expenditure and net lending was changed at 7.2 percent of GDP.

Government revenue as a percentage of GDP was 5.0 percent in May.

Sri Lanka’s economy has expanded in nominal terms with higher inflation driven by a currency collapse as well as higher economic activity.

Sri Lanka’s budget deficit was also down.

Imports of cars pushed up vehicle usage and petrol taxes, unlike public transport, where operators – including state railways – demand various subsidies which are then recovered from non-users through food and other taxes.

A standard tax on diesel and kerosene would also capture other sectors that are now avoiding taxes. (Colombo/July01/2016)

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