Containing Budget deficit at 6.2% level amidst challenges a key achievement

Monday, 7 January 2013 00:00 -     - {{hitsCtrl.values.hits}}

Finance Secretary Dr. P.B. Jayasundera on Friday singled out the containment of the Budget deficit to 6.2% or thereabouts in 2012 amidst many challenges as being a key achievement by the Government.

“A key achievement which the Treasury is proud of is the containment of the Budget deficit to around 6.2% or 6.3% in 2012 despite modest growth in Government revenue and amidst 6% public investment. This reflects the Government’s capacity and willingness to adjust certain expenditures in its resolute path towards lowering fiscal deficit,” Dr. Jayasundera told the media on Friday.

He also said that the Government was “firmly committed” to achieving the targeted Budget deficit of 5.8% for 2013 along with the reform agenda and persisting with the robust public investment program. However, he emphasised that greater private sector investment was critical too.

In that context, Dr. Jayasundera noted that there was a good quality Foreign Direct Investment (FDI) pipeline for 2013 onwards.

Though FDIs in 2012 fell below the target of $ 2 billion, the Finance Secretary said he forecasts FDI to be around $ 1.5 billion in 2013. “2012 may have been off target, but it must be realised that Sri Lanka has graduated to a stage where the country can approve and handle big investments, which however takes a longer time. I am happy with the credible FDI pipeline we have at present,” Dr. Jayasundera added.

To stimulate investments by locals, Treasury Secretary said during the past two years the Budget had endeavoured to create a tax regime that encouraged investments. “Today Sri Lanka is a low-tax regime country that promotes investments and savings,” he said, adding that the Small and Medium Enterprise sector was a big beneficiary.