Sri Lanka plans 8-pct budget deficit for 2010: fiscal report

Mar 02, 2010 (LBO) - Sri Lanka is planning a budget with a deficit of about eight percent of gross domestic product for 2010, a finance ministry report said, after provisional data said the 2009 gap has increased to over ten percent of the economy. In 2009 the government hoped to run a deficit of only 7.
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0 percent of GDP and trim it further to 6.
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6 percent in 2010 under a deal agreed with the International Monetary Fund.

The deal is currently suspended following the runaway deficit in 2009. The IMF is expected to negotiate a new deal with Sri Lanka after a budget is formally presented to the new parliament after April 08.

Sri Lanka's parliament is now dissolved. The government is operating an interim four month 'vote on account' based on last year's projected budget.

A pre-election fiscal report released this week said the government expected revenues of 824.
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6 billion rupees (15.0 percent of GDP) in 2010 and hoped to spend 932.5 billion rupees in current expenditure alone.

This would result in a revenue deficit (a deficit in the current budget) of 107.9 billion rupees or 1.9 percent of GDP, which is lower than the massive 3.8 percent revenue deficit provisionally reported for 2009.

The finance ministry is assuming economic g