Sri Lanka reverses the decades-long downward spiral of Government revenue – Finance Minister

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“Despite all economic challenges, Sri Lanka witnessing some early harvests of our prudent economic management policies. As a new Government, we have been able to make a decisive turnaround in the public finance management within a relatively short-period. We introduced reforms to domestic revenue mobilization and engaged productively with international development partners to regain lost confidence in Sri Lanka. Such measures helped reverse the decades-long downward spiral of Government revenue which increased up to 14.2% of GDP in 2016 from 11.5% of GDP in 2014, marking a growth of 41% in absolute terms. In 2017, Government revenue, I am certain, will come closer to 15% of GDP, ensuring a revenue growth of 13% in 2017 over 2016. Further, we are in the process of effecting revenue reforms in all areas including Inland Revenue, Customs, Excise and others in a manner to raise the Government revenue closer to 20% of GDP over the medium-term. As revenue increases, and expenditure remains well targeted and rationalized, overall budget deficit is expected to reduce up to 3.5% of GDP by 2020”, so said Minister Mangala Samaraweera presenting his first budget speech titled ‘Enterprise Sri Lanka’ to the parliament  last evening (9th Nov.).

He added that overall economy is expected to grow by around 4.5% in 2017 and projected to move gradually to a higher GDP growth path of around 6.0% by 2020, while containing the level of unemployment at around 4% level.

“Although, we have already taken measures to strengthen the official reserves, but relatively high inflation observed in the recent months is expected to decelerate as the effects of supply side shocks wane. Thus, we expect real interest rates and real exchange rates to adjust towards equilibrium levels over the medium-term”, he further said.