Sri Lanka plans primary surplus of 1-pct of GDP in budget 2018

Nov 09, 2017 (LBO) – Sri Lanka hopes to achieve for the first time in almost 6 decades a primary surplus of 1 percent of GDP in budget 2018, Finance Minister said.

Finance Minister Mangala Samaraweera delivering the budget speech said in 2018, the government envisages a GDP growth of 5 percent and inflation of around 6 percent.

He said budget will support the achievement of medium-term targets such as per capita income of 5,000 dollars, one million new jobs, FDI inflows of 5 billion dollars, and doubling exports to 20 billion dollars.

According to the summery of the budget, budget deficit for 2018 is expected to be 4.8 percent of GDP.

Samaraweera said next 3 years will be crucial with debt repayments amounting to almost 7,000 billion rupees.

This includes the repayment of international sovereign bonds which will mature every year amounting to almost 600 billion rupees where bunching is a severe strain on the Government finances.

In 2018 alone, the debt repayment amounts to 1970 billion rupees.

“As was the case in the last 2 years, you would have noticed that we have not compromised on the investments to be made in 2018 in spite of the impending debt burden,” Samaraweera said.

“However, we do need support. As such, I propose to charge a Special Levy for Debt Repayment at the rate of 20 cents per Rs. 1,000 on the total transaction made through banks with effect from 1st April 2018.”

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