Govt. aims fiscal deficit of 4.4% of GDP this year

The government aims to bring down the fiscal deficit to 4.4 percent of gross domestic product (GDP) this year, to be in line with the deficit target of 3.5 percent of GDP set by the International Monetary Fund (IMF) for 2020. 

A Finance Ministry statement said the total expenditure for this year is estimated at Rs.4,550 billion, while the income is estimated at Rs.2,400 billion, thus resulting in a fiscal deficit of 4.5 percent of GDP. 

However, the analysts Mirror Business talked to opined that 4.8-5 percent could be a more realistic budget deficit figure for 2019, given the approaching elections and the people’s expectations.  

Sri Lanka is estimated to have narrowed its fiscal deficit from 7.6 percent of GDP in 2015 to 5.3 percent in 2018.

Further, under Budget 2019, the government expects to expand the primary surplus, which was achieved in 2018, after a hiatus of 
five decades.

Under the staff-level agreement reached with the IMF last week, the government is expected to raise the primary surplus to 1.5 percent of GDP, in the 2019 budget.
The government also expects the expansion in the primary surplus will result in lower borrowings for debt servicing.

The government has allocated a record Rs.2,200 billion for debt servicing in 2019.

Meanwhile, the Finance Ministry said Budget 2019, which will be presented to Parliament today by Finance Minister Mangala Samaraweera, would be based on the key theme of ‘empowering the people, nurturing the poor’. 

The government’s main social empowerment programme, Enterprise Sri Lanka, is expected to get a boost from Budget 2019.

Six days have been allocated for the debate on the second reading of the budget, from March 6 to 12. The committee stage debate will run for 19 days, from March 13 to April 5 and the final voting will be held on April 5, afternoon.