Sri Lanka’s budget likely to lead to slower fiscal consolidation, Moody’s
- CNL Reporter
- February 19, 2025
- News
- Moody’s
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Sri Lanka’s budgeted expenditure for 2025 will likely lead to a wider fiscal deficit and slower-than-expected fiscal consolidation, Moody’s Ratings said on Tuesday, a day after the island nation unveiled its budget.
Sri Lanka aims to transform its crisis-hit economy to prepare to resume debt repayments from 2028, President Anura Kumara Dissanayake said on Monday while announcing the budget which is seen as a key step towards returning the country to durable, long-term growth.
The budget is mostly in line with targets set under a $2.9 billion International Monetary Fund (IMF) programme, including a key 2.3% primary account surplus goal.
Expenditure is estimated at 21.8% of GDP as Sri Lanka directs more resources towards welfare and infrastructure development, analysts said, while revenue will be 15.1% of GDP.The budget has set a deficit target of 6.7% of GDP, which falls short of a 5.2% goal for 2025 preferred by the IMF.
