Sri Lanka does not expect major deviations off budget targets: Treasury official

ECONOMYNEXT – Sri Lanka does not expect ‘major deviations’ from budget targets, a Treasury official said as imports fell following monetary instability in 2018 and a suicide bombers hit tourism in April.

Finance Ministry consultant Deshal De Mel said there was a reduction on import based tax revenues but other sectors were bringing in money.

"We do not see a major deviation off targets," de Mel said. 

Sri Lanka’s imports after private credit fell after a soft-peg with the US dollar collapsed following monetary instability triggered by money printing in 2018.

The April suicide bombing badly hit tourism.

Sri Lanka was targeting an ambitious 4.4 percent of gross domestic budget deficit or 685 billion rupees on an ambition growth of revenue to 2,357 billion rupees from 1,932 billion rupees in 2017.

However GDP is expected to be lower than forecast, which may also push up the deficit in real terms.

"There may be a re-prioritization of expenditure," de Mel said.

Sri Lanka is also raising debt abroad for spending in the budget and also debt repayments.

So far this year 4.4 billion US dollars had been raised.

De Mel said Sri Lanka can comfortably repay debt this year and have a little left over.

Sri Lanka is expected to go to markets for at least 2.0 billion US dollars for management of debt in 2020. (Colombo/June28/2019)