Sri Lanka President presents interim budget amidst financial crisis

Wickremesinghe says talks with the IMF have reached a 'successful level'



Photo: Reuters
Photo: Reuters

By Reuters

Published: Tue 30 Aug 2022, 1:49 PM

Last updated: Tue 30 Aug 2022, 2:03 PM

On Tuesday, Sri Lankan President Ranil Wickremesinghe presented an interim budget aimed at stemming the country’s worst financial crisis in decades.

Here are the highlights from the budget speech of Wickremesinghe, who also serves as the country’s finance minister.

IMF

  • Wickremesinghe says talks with IMF have reached a "successful level”.
  • Hopes to start talks with creditors.
  • After IMF programme concludes, decisions will be presented to the parliament.

Targets

  • Targeting inflation in mid-single digits.
  • Target medium term economic growth at 5 per cent.
  • Target to increase public revenue to 15 per cent of GDP by 2025, from 8.2 per cent.

Reforms

  • Will encourage FDI and joint ventures to develop Sri Lanka’s natural resources.
  • Loss-making state enterprises to be restructured under a special unit.
  • New legislation to be introduced to strengthen fiscal management.
  • National debt management agency to be established under the finance ministry.

Banking/Taxation

  • New Central Bank Act to be introduced.
  • Central Bank Act to reduce politicisation and money printing of monetary authority.
  • Plan to increase reserves and reduce impact on exchange rate.
  • Fresh taxes to be introduced in the 2023 budget.

Welfare

  • New system to be established to better target welfare, fund sent directly to bank accounts.
  • Additional 4.6 billion rupees ($12.85 million) for welfare support in next four months.

($1 = 358.0000 rupees)

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