IMF: Rebuilding to pressure Sri Lanka ’05 fiscal outlook

Ishara S. Kodikara | AFP | Getty Images Sri Lanka Prime Minister Ranil Wickremesinghe, center, speaks to supporters at the prime minister's official residence in Colombo on December 16, 2018, after he was reappointed as prime minister by Sri Lanka's president, the same man who fired him from the job nearly two months ago.

Although the post-tsunami reconstruction effort in Sri Lanka will help domestic economic growth, it may affect the country’s fiscal outlook, the International Monetary Fund said. Although the post-tsunami reconstruction effort in Sri Lanka will help domestic economic growth, it may affect the country’s fiscal outlook, the International Monetary Fund said. “Lower tourism receipts and a reconstruction-related surge in imports are expected to widen the current account (budget) deficit by almost 2 percentage points of gross domestic product relative to pre-tsunami projections,” the IMF said on its Web site.

The IMF expects Sri Lanka’s budget gap to widen to 9.6% of GDP in 2005 from a pre-tsunami deficit target of 7.5%. If that happens, the deficit will be wider than last year’s 8.2%.

The IMF also said the island mightn’t meet its budget deficit target because of “higher current and capital outlays and a marginal adverse impact on revenues.”

Sri Lanka’s government has estimated the cost of rebuilding after the Dec. 26 devastating tsunami – which lashed the country’s southern and eastern coastlines – at $2 billion. A large part of the funds are expected to be s