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Sunday June 26th, 2022

Sri Lanka plans new budget 2022, original targets cannot be achieved: PM

ECONOMYNEXT – Sri Lanka plans to present a new budget for 2022 with targets of the original fiscal plan missed by a wide margin, newly appointed Prime Minister Ranil Wickremesinghe said.

“I plan to present a new budget in place of the development budget presented for 2022,” Prime Minister Wickremesinghe said.

“I plan to present it as a relief budget.”

Sri Lanka generally prints money to keep interest rate down, pushes up inflation, depreciate the currency, blames it on imports and then give ‘relief’ to through ‘people friendly’ budgets, creating more poverty and hardships.

However this year taxes are expected to be raised.

The budget already presented to parliament expected 2.3 trillion rupees of revenue but the actual revenue forecast was only 1.6 trillion rupees, Wickremesinghe said.

For 2022, total expenditure was presented as 3.3 trillion but it is now projected go up to 4.0 trillion rupees with higher interest and other costs.

The deficit is projected at 2.4 trillion rupees, or 13 percent of gross domestic product, he said.

The original budget projected a deficit of 1.6 trillion rupees or 8.8 percent of GDP.

The approved borrowing limit was 3,200 rupees.

By the second week of May 1,920 billion had been spent. There was only 1,250 billion rupees left.

“We decided at the cabinet meeting yesterday to present a proposal to parliament to raise the Treasury bill limit from 3.0 trillion to 4.0 trillion rupees,” Wickremesinghe said.

Wickremesinghe said he may have to give approval to print money for salaries this month reluctantly.

Related

What Sri Lanka’s IMF program should look like

Sri Lanka budget deficit 12.2-pct of GDP in 2021

Sri Lanka will have to present a new budget under the IMF program which will boost revenues cut spending and bring the deficit down over time. (Colombo/May16/2022)

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