Sri Lanka revenues up in 1Q; spending keeps pace
ECONOMYNEXT – Sri Lanka’s tax revenues rose 26 percent in the first quarter of 2017 from a year earlier to 436 billion rupees, but capital spending also rose, keeping the budget deficit up, data released from the finance ministry shows.
Revenues improved from 2.7 percent of gross domestic product in the first quarter of 2016 to 3.1 percent of estimated GDP for 2017 with higher value-added taxes kicking in.
Current spending rose 13.5 percent from a year earlier to 484 billion rupees, or 3.6 percent of GDP in both years. There was a sharp spike in interest payments to 209 billion rupees from 154 billion rupees amid bond maturities in the first quarter.
Salaries and wages also rose to 147 billion rupees from 139 billion rupees a year earlier.
The current account deficit narrowed in nominal terms to 48 billion rupees from 80 billion rupees, or to 0.4 percent from 0.7 percent.
However, capital spending rose 52 percent to 152 billion rupees, expanding the budget deficit 10.5 percent to 199 billion rupees. As a share of GDP, the deficit remained at 1.5 percent.
Sri Lanka is targeting a deficit of 4.6 percent of GDP, down from 5.4 percent last year.