Budget deficit expected to widen to 8.5% of GDP to Rs.1.4 tn in 2020

COLOMBO (News1st): Sri Lanka's budget deficit is expected to widen in 2020 to 8.5 percent of GDP against 6.8 percent last year, much higher than the IMF's projection of 5.3 percent. Sri Lanka's overall budget deficit in 2020 is estimated to increase by 325 billion rupees to 1.4 trillion rupees in 2020, which is an increase of 32 percent compared to 2019, the 2019 annual report of the Finance Ministry showed. The overall fiscal balance is expected to increase to 1.4 trillion rupees in 2020, a 32 percent increase against 1.01 trillion rupees last year. The deficit of 325 billion rupees will be financed via 37 percent of foreign financing, while the remaining will be financed domestically. State revenue is expected to decline by 24 percent to 1.5 trillion rupees in 2020, compared to last year's figure of 1.9 trillion rupees, mainly due to the decline in Tax based revenues. State expenditure is expected to marginally decline by 4 percent to 2.8 trillion rupees, however, Subsidies and transfers are estimated to increase by 68 Billion Rupees, while salaries and wages are expected to increase by 64 billion rupees.