Sri Lanka hopes to keep budget gap below 9%

The Sri Lankan government expects its budget deficit to be less than 9% of gross domestic product in 2005, helped by steady revenue growth, the country’s treasury secretary said Wednesday. The Sri Lankan government expects its budget deficit to be less than 9% of gross domestic product in 2005, helped by steady revenue growth, the country’s treasury secretary said Wednesday. “We want to keep the budget deficit 0.5-1.0 percentage point below 9% of GDP this year,” P.B. Jayasundera told a news conference.

He said a steady revenue collection will help the outlook .

Total revenue climbed 22% on year in the first half of this year, he said.

Jayasundera said spending is expected to be high this year due to expenses from post-tsunami reconstruction, but noted that those costs will be funded by foreign aid.

Foreign governments and international agencies have pledged Sri Lanka $2 billion in assistance, in line with government estimates on the total reconstruction cost.

Analysts have said that any additional spending – necessary if pledged aid doesn’t come through as promised – could widen this year’s budget deficit to around 9.4%-9.8% of GDP, compared wit