Sunday, 09 August 2020 14:53

Sri Lanka’s budget deficit widens amidst Covid-19 economic shocks

Sri Lanka’s shaky public finances continue to receive blows from the fallout of Covid-19 and the spread of the virus has exerted repercussions on the economy.

Sri Lanka’s already-battered tourism industry will be further hit and the order books of some of the key exporters continue to suffer under the present global and local conditions, economic analysts said.

During the first five months of 2020, government revenue as a percentage of estimated GDP declined to 3.7 percent Rs.585.3 billion from 4.9 percent Rs. 7711.3 billion recorded in the corresponding period of 2019, Central Bank data showed.

During the same period, total expenditure and net lending of Rs. 1,195.4 billion as a percentage of estimated GDP declined to 7.6 per cent from 7.7 per cent Rs. 1,206 recorded in the corresponding period of 2019.

Domestic financing increased to 4.7 per cent of estimated GDP in first five months of 2020 compared to 2.2 per cent of GDP in the corresponding period of 2019, while foreign financing as a percentage of estimated GDP recorded a net repayment of 0.8 per cent during the first five months of 2020 compared to a net borrowing of 0.6 per cent recorded in the corresponding period of 2019 corresponding period of the previous year.

(LIN)

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