COLOMBO: Sri Lanka’s budget deficit has narrowed to 2.7 percent of estimated gross domestic product for 2016, down from 2.7 percent a year earlier, an official said.
The central bank’s Director of Economic Research K M M Siriwardana said total expenditure and net lending was changed at 7.2 percent of GDP. Government revenue as a percentage of GDP was 5.0 percent in May.
Sri Lanka’s economy has expanded in nominal terms with higher inflation driven by a currency collapse as well as higher economic activity.
Sri Lanka’s budget deficit was also down. Imports of cars pushed up vehicle usage and petrol taxes. Unlike public transport, where operators – including state railways – demand various subsidies which are then recovered from non-users through food and other taxes.
A standard tax on diesel and kerosene would also capture other sectors that are now avoiding taxes.
