Govt. targets 4.7% budget deficit: Ravi K

Thursday, 15 September 2016 00:08 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lanka will cut its budget deficit to 4.7% of gross domestic product (GDP) in 2017 from 5.4% this year, Finance Minister Ravi Karunanayake has told the International Monetary Fund, his ministry said on Wednesday.

The government has performed better than expected, going by fiscal numbers for the first half of 2016 that were released this week, although economists have said achieving this year’s target will still be challenging.

An IMF mission is in Colombo to a review a loan of $1.5 billion approved in June to support Sri Lanka’s economic reform agenda.

“This year’s target will be 5.4%. It will be further reduced to 4.7% in 2017,” Karunanayake told the IMF mission, the ministry said in a statement.

President Maithripala Sirisena’s coalition government faces a delay in implementing value-added-tax (VAT) hikes after two court rulings forced a temporary suspension of the move.

But the cabinet has approved the increase of the VAT to 15% from 11% now, with some amendments, government spokesman Gayantha Karunathilake said on Wednesday.

The amended tax bill will also impose tax on telecoms services, tobacco products, air ticketing, and housing projects, a cabinet document showed.