Sri Lankaâ€™s 2019 budget targets 4.8-pct deficit
ECONOMYNEXT – The Sri Lankan government’s budget for 2019 to be presented on March 05 is targeting a deficit of 4.8 percent of gross domestic product, up from 3.5 percent estimated earlier, the finance ministry said.
The governement had agreed to a budget deficit of 3.6 percent of GDP in its talks with the International Monetary Fund.
The Cabinet of Ministers has approved the appropriation bill for 2019 with annual expenditure at 4,470 billion rupees, the finance ministry statement said.
About half the spending – 2,200 billion rupees – has been allocated for debt servicing in 2019.
“This is the highest a government in the history of this country is compelled to bear for debt servicing,” the statement said.
Recurrent expenditure will be 1,425 billion rupees while capital expenditure will be 838 billion rupees.
State revenue is expected to be increased to 15 percent of GDP this year, having been gradually increased after the present government came in to power in 2015 from 11.5 percent of the GDP in 2014.
This year’s national budget is prepared under the Medium Term Fiscal Framework (MTFF) by adopting the performance-based budgeting approach with the aim of strengthening the on-going fiscal consolidation programs, the finance ministry said.
“The government is also aiming to achieve the target of increasing the state revenue to 17 percent and limiting the recurrent expenditure to 15 percent of the GDP in 2021.”