Sri Lanka to keep to 6.2-pct GDP budget gap in 2012: Treasury Secy

Chandi Dharmaratne

May 02, 2012 (LBO) – Sri Lanka will keep to a 6.2 percent of gross domestic budget gap planned for 2012 despite higher than expected interest costs amid monetary tightening, Treasury secretary P B Jayasundera said. “We will strictly adhere to the 6.2 budget deficit announced in 2012,” he told reporters Monday.

“We see the comfort margin in that because the revenue levels are basically settling down after policy reforms announced in the 2011 budget.”

Points of Concern

He said the interest bill would be higher, but taxes on interest will bring in more revenue.

“Interest expense will be an additional adjustment,” Jayasundera said. “But I hope if anybody is paying higher interest on those receipts they must also pay non refundable withholding tax on interest. So these things will not cause much of a disturbance.”

“Expenditure other than non-interest expenditure is all well within our ceiling,”

There have been agitations for further public sector wage increases. But Jayasundera said wage increases and cost of living allowances have been given and in four months work will begin on the next budget for 2012.

Jayasundera said and rupee depreciation will also increase rupee proce