PBJ says Budget 2022 will go beyond traditional parameters

• Expresses confidence in FinMin to present non-traditional, transformational budget
• FinMin Secy. says Budget 2022 would be equipped with measures focusing on sizeable reduction in fiscal deficit
• Conveys commitment to maintain policy framework including tax policies
• Green economy, renewable energy, information technology and digital governance in front seat

The government is expected to present a non-traditional and transformational budget targeting a sizeable reduction in the country’s fiscal deficit for 2022 by focusing on further cutting down non-essential and non-prioritised  State expenditures while maintaining the stable policy environment including the tax policy.

Secretary to the President Dr. P.B. Jayasundara yesterday expressed his full confidence that the Finance Ministry along with the government would present a forward-thinking budget with a new vision and programme that goes beyond the traditional parameters of budget that the country has seen so far.

Finance Ministry Secretary Sajith Attygalle said the Budget 2022 would be equipped with measures focusing on a sizeable reduction in the widening gap between State revenue and expenditure unlike previous budgets, as the current trend of widening budget deficit is not in the best interest of the country.

The two top State officials made these remarks joining  a media briefing organised under the theme ‘Future Budget and the Economic Situation of the Country,’ held virtually at the Presidential Media Centre yesterday.

Meanwhile, Attygalle reiterated the government’s commitment to maintain the policy framework including tax policies, which might otherwise lead to a dent in investor sentiment.  He opined that as the economic growth is expected to pick up pace with the normalisation of the country, and the tax base would also broaden.

Commenting on the government’s focused areas to spur growth, Jayasundara noted that the priority will be given to green economy, renewable energy, information technology and digital governance.

According to World Bank (WB), Sri Lanka’s fiscal deficit is estimated at 10.5 percent of GDP this year and it is expected to slightly come down to 10.1 percent of GDP in 2022 due to weak revenue collection and rigid expenditures.

However, Attygalle was optimistic that the country would soon get on the path to achieve the government’s medium term fiscal management targets to bring down the fiscal deficit to 4-4.5 percent of GDP by 2025.

According to the estimated expenditure contained in the Appropriation Bill, which was tabled in Parliament, the total expenditure for 2022 is estimated at Rs. 5.13 trillion, of which the expenditure on public debt repayment was Rs. 1.52 trillion, followed by Rs.980.2 billion for the payment of salaries of public servants.

The World Bank projected Sri Lanka’s debt to GDP ratio to further increase in 2022 to 121.9 percent of GDP from estimated 116.5 percent this year.