Nov 22, 2011 (LBO) – Sri Lanka has managed to gradually reduce the government budget deficit without cutting public investment which is needed to build the capacity to enable private investments, an official said. Treasury secretary P B Jayasundera said the government was maintaining the downward momentum in budget deficits and inflation had been brought down with improved domestic production, especially of food.
“The government has been bringing the budget deficit down gradually and we maintained the downward momentum except in 2009 when there was the impact of the global financial crisis,” he told a seminar on the 2012 budget organised by the Inland Revenue Department.
Jayasundera said the 2012 forecast budget deficit target of 6.2 percent of Gross Domestic Products “is a doable adjustment,” coming down from a deficit of seven percent in 2011.
The out turn of the 2011 budget is estimated at seven percent of GDP, down from eight percent in 2010.
” The reduction in the fiscal deficit was not achieved by compromising public investment which is being maintained at around an estimated six percent of GDP in 2011,” Jayasundera said.
Public investment fell last year from an actual 6.4 percent of