ECONOMYNEXT – Positive trends in Sri Lanka’s economy in the past year can be attributed to the 2023 budget, State Minister of Finance Ranjith Siyamabalapitiya said responding to opposition criticism.
Siyambalapitiya told parliament Tuesday November 14 morning that proposals made in the appropriation bill for 2023 by President and Finance Minister Ranil Wickremesinghe in November 2022 were instrumental in the economy’s recovery in the wake of the 2022 currency crisis.
Economic growth which stood at negative 12.4 by the third quarter of 2022 to has improved to negative 3.1 by the second quarter of 2023, Siyambalapitiya said, as a result of the budget proposals.
“There is broad consensus that by the end of Q4, growth will be positive,” he said.
Foreign reserves which stood at 1,898 billion dollars by December 2022 had increased to 3,500 billion by September 2023, said Siyamabalapitiya.
Inflation had reduced rapidly from 51.7 percent in January 2023 to 1.3 percent in September, he said.
“No one can say the positive aspects of the 2023 budget proposals did not contribute to this considerable drop in inflation,” he added.
The central bank maintained a tight monetary policy for months to tame inflation.
The state minister noted that policy rates had also dropped, though he did not attribute it to the budget. Lending rates that stood at 15.5 percent in December 2022 had lowered to 12 percent, while the deposit rate dropped from 14.5 percent in Decemer 202 to 11 percent by September 2023 September, 12 percent, he said.
Sri Lanka’s primary balance also improved as a result of the 2023 budget, claimed Siyambalapitiya.
While the country recorded a 247.3 billion negative primary balance from January to July 2022, he said, it reduced to negative 27.4 billion from January to July 2023.
“Year on year, what was a negative 3.7-percent deficit, we have been able to control to negative 0.7 this year. This is a 90-percent increase,” he said.
Revenue to GDP, in 2022, which was 8.2 percent in 2022 (2,013 billion rupees) grew to 10.1 percent or to 2,596 billion rupees in 2023, the state minister said..
“This is a a 28.9 percent increase,” he said, attributing it to the 2023 budget.
Tax revenue to GDP in 2022 was 7.3 percent, the world’s lowest revenue to GDP at just 1,751 billion rupees, but in 2023 it increased to 9.2 percent at 2,596 billion, he said.
“This is a 48 percent increase. The sole ownership of this goes to the 2023 budget,” he said.
“In 2022 August, the rupee was 361 to the dollar. In 2023, it’s 321.58 rupees. GDP in 2022 was 24,148 billion rupees, in 2023 28,100 billion. All these successes belong to the 2023 budget,” he said. (Colombo/Nov14/2023)