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Sri Lanka needs spectacular fiscal gains to reach revised budget: economist

Nov 29, 2007 (LBO) – Sri Lanka's state revenues have to grow twice as fast in the last quarter and expenses growth has to plunge to single digits for revised budget targets for 2007 to be reached, a private sector economist said. .

According to disclosures under Sri Lanka's fiscal responsibility law revenue up to September 2007 was 406 billion rupees compared with 335 billion in the same period for 2006. But it has to reach 605 billion by end December.

"When you look at the revenue growth, the government's numbers for the first nine months which have been published saw 20 percent growth," Amal Sanderatne, chief executive of Frontier Research said.

"To reach its targets for the full year, suddenly there has to be a growth of 40 percent in the last three months," he told a seminar on the current monetary environment and its effects on business organised by the Sri Lanka Ceramics Council this week.

Sri Lanka's industrialists are struggling to make sense of official projections on economic growth, inflation and interest rates that go fantastically off target leaving them struggling for direction.

Expenditure also has to slow down in the last quarter to reach the revised budget targets presented to parliament.

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