Sri Lanka Budget seeks to balance poll pledges with IMF demands – Report
- CNL Reporter
- February 17, 2025
- Political
- Sri Lanka Budget seeks to balance poll pledges with IMF demands – Report
- 0 Comments
Sri Lanka President Anura Kumara Dissanayake will need to walk a tightrope in his budget Monday, seeking to reduce the economic burden on the poor while taking steps to keep a $3 billion International Monetary Fund bailout on track.
Dissanayake, who is also the South Asian nation’s finance minister, is expected to lower income taxes and boost welfare spending when he delivers his first full budget since sweeping into power last year, providing some relief to citizens following an economic crisis in 2022. At the same time, he’s expected to outline policies to boost revenue and build fiscal buffers to bolster the $85 billion economy.
Investors are closely monitoring the budget speech for clarity on the government’s fiscal consolidation path, especially measures to trim public-sector spending, privatization of state assets, and policies to attract investments.
The IMF has projected Sri Lanka’s budget to hit a primary surplus of 2.3% of gross domestic product in 2025, from a target of 1% last year. To achieve that, the government will look to boost revenue from excise duties and lifting of restrictions on imported vehicles, while cutting wasteful spending.
Meeting the IMF targets will help the government secure more funds and aid faster debt reduction. The lender expects the island nation to narrow its fiscal deficit to 5.2% in 2025 from 7.6% last year
