Sri Lanka expects revenues to improve by third quarter: Treasury Secy
ECONOMYNEXT – Sri Lanka is expecting revenues to improve from the third and fourth quarter of 2019, while spending was being ‘rationalized’ to manage the deficit, Treasury Secretary R H S Samaratunga said.
The government is cutting capital spending by 15 percent in 2019 and will also trim some current spending.
But security spending has increased while revenues were down, Samaratunga said.
Sri Lanka was targeting a deficit of 4.5 percent of gross domestic product for 2019.
Samaratunga said authorities were re-assessing the deficit target.
In the first four months of 2019 Sri Lanka collected 551 billion rupees of tax revenues, 91.5 billion rupees below target as imports fell in the wake of monetary instability and trade controls imposed in 2018.
In April economic activity reduced following Easter Sunday bombings, which hit hard the tourism sector.
The government had also given tax waivers for tourism and subsidized credit.
The rupee collapsed from 153 to 182 to the US dollar in 2018 and has since appreciated to 176 to the US dollar, but a prolonged liquidity shortage and the currency collapse has killed demand.
In the first four months the deficit was already at 2.3 percent of GDP, up from 1.7 percent last year. (Colombo/July22/2019)