Sri Lanka’s fiscal sector records robust performance in first 4 months
View(s):By Bandula Sirimanna
Sri Lanka’s fiscal sector has recorded a robust performance experiencing a strong growth in the first four months this year supported by domestic factors, decreasing inflation and favourable economic policies, Finance Ministry sources disclosed.
It is driven by the increased revenue mobilisation together with the decline in expenditure with the government’s efforts to strengthen the fiscal consolidation.
Accordingly, a primary surplus of Rs. 365 billion has been achieved in the first four months of 2024 compared to the primary deficit of Rs. 5.3 billion recorded in the same period of 2023.
The budget deficit has also narrowed by Rs. 463.2 billion to Rs. 361.1 billion in the first four months of 2024 compared to the same period of 2023.
Total government revenue increased by 48.3 per cent or Rs. 396.7 billion to Rs. 1,218.1 billion in the first four months of 2024 from Rs. 821.3 billion in the same period of 2023, realising 29.5 per cent of the annual estimate, a senior official of the public finance policy department revealed.
This was a result of several factors including the aggressive tax policy measures introduced since June 2022, gradual improvements in the revenue administration, positive economic growth recorded since the third quarter of 2023 and gradual lifting of import restrictions.
Total government revenue excluding grants increased by 48.3 per cent to Rs. 1,216.0 billion in the first four months of 2024 compared to Rs. 820.1 billion in the same period of 2023.
This was mainly due to the increase in tax revenue by 50.5 per cent to Rs. 1,117.8 billion from Rs. 742.6 billion.
Government expenditure declined by 4.0 per cent to Rs. 1,579.2 billion in the first four months of 2024, compared to Rs. 1,645.6 billion in the same period of 2023.
Recurrent expenditure declined by 4.4 per cent to Rs. 1,419.3 billion in the first four months of 2024, compared to Rs. 1,485.0 billion in the same period of 2023 due mainly to the decline in expenditure on interest payments, finance ministry data show.
Capital expenditure and net lending declined by 0.4 per cent to Rs. 159.9 billion in the first four months of 2024 from Rs. 160.6 billion in the same period of 2023.
Tax revenue significantly increased by 50.5 per cent to Rs. 1,117.8 billion in the first four months of 2024 achieving 29.3 per cent of the annual estimate for 2024.
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