Sri Lanka budget off target, real revenues fall in 2007

April 10, 2008 (LBO) – Sri Lanka’s state revenues were sharply lower than budgeted and current expenditure soared in 2007 while taxes slipped in real terms, newly released government data showed. The government’s total revenues were off target by 34.7 billion with only 565 billion rupees out of the 599.8 billion rupees flowing into government coffers, data published in the Central Bank’s annual report showed.

Meanwhile, current expenditure rose by 26 billion rupees more than budgeted to 622.7 billion rupees.

The current account of the budget which shows the difference between day-to-day expenditures and total revenues, was 57.7 billion rupees or 1.6 percent of gross domestic product (GDP) in deficit, though a surplus was projected originally.

Sri Lanka has not had a surplus on the current budget since 1987 and the projection was widely disbelieved by independent analysts. A surplus has again been projected for this year.

The government cut back capital expenditure by 74 billion rupees below budget to 229 billion rupees, allowing the overall budget deficit to fall to 7.7 percent of gross domestic product (GDP) or 276 billion. Last year the deficit was 8.4 percent of GDP.