2013 budget deficit lowest since 1977
December 27, 2012, 8:16 pm
While the government is facing a tough time meeting the 2012 budget targets, a senior minister told parliament that the budget deficit for 2012 and 2013 would be met.
"The 2013 Budget has committed to a Budget deficit of 5.8 percent of GDP; the lowest ever since 1977. We have committed to this, having proved ourselves that deficits can be reduced without cutting welfare and development spending," Senior Minister for International Monetary Cooperation and Deputy Finance Minister Dr. Sarath Amunugama told parliament recently.
"The Government has not privatized any enterprise either. This year, in 2012 we are pleased to announce, that despite many challenges and particularly with the drought, the Government has kept the deficit target of 6.2," he said.
"The deficits of double digits are a thing of the past. The same is proved for inflation, same is proved for unemployment and poverty. Shouldn’t the Minister of Finance and Planning take the credit for it? Look at the struggles other countries are making to bring the deficit down, they are going through painful, unstable, violent paths. This has not been the case in Sri Lanka. Look, at the banking system here, all the banks are well capitalized and remain sound. Non? performing loans of all banks remain below critical levels. The banking system does not remain vulnerable which is also not the case in many other countries today. Shouldn’t the Central Bank take the credit for this? They have performed well, in terms of their regulatory responsibilities," the senior minister said.
Dr. Amunugama said the government has met the budget deficit target of 6.2 percent of GDP this year, but published data covers the period January to September.
The budget deficit as a percentage of GDP for the first nine months of this year reached 6.44 percent, exceeding the full year’s target of 6.2 percent, as government expenditure grew nearly twice as fast as revenue growth, latest data released by the Central Bank showed.
Tax revenue grew 6.55 percent year-on-year to Rs. 629.5 billion during the first nine months of this year. Non tax revenue reached Rs. 81.8 billion growing 16.19 billion while grants surged 48.48 percent to Rs. 14.4 billion.
Total revenue and grants reached Rs. 725.7 billion during the nine months period, up 8.16 percent from a year earlier.
Recurrent expenditure grew 9.07 percent to Rs. 851.8 billion while capital expenditure increased by 31.84 percent to Rs. 356.9 billion.
Total government expenditure was up 14.93 percent to Rs. 1,208.7 billion.
The budget deficit for the period January to September 2012 reached Rs. 483 billion, a 26.87 percent increase from the previous year. As a percentage of GDP, this deficit stood at 6.44 percent, as against 5.81 percent a year ago.