Sri Lanka surpasses IMF June fiscal targets with room to spare
- CNL Reporter
- August 11, 2025
- News, Political
- IMF
- 0 Comments
Sri Lanka has beat key fiscal targets set in an International Monetary Fund program for June with room to spare amid strong tax revenues, including from vehicles, official data show.
The primary balance of Sri Lanka’s central government budget was a surplus of 859 billion rupee, sharply higher than the 130 billion rupee target set in the currently applicable IMF program.
The primary balance is revenues minus expenditure before interest costs.Countries with good non-activist central banks which provide low inflation and low nominal interest rates as a consequence usually have deficits in the primary account of the budget.
A surplus in the primary account indicates that interest costs are so large, that they are bigger than the overall deficit in the budget.
However, in IMF programs, which are made when the central bank cuts rates and triggers a balance of payment crisis, interest rates have to go up to very high levels to stop the crisis and restore the lost confidence in the currency by private credit contraction.
As a result, the correction has to come from primary or non-interest expenditures, which are under the control of the elected politicians and the Finance Ministry.
