Sri Lanka on Track with IMF Targets: Fiscal Gains in 2024

COLOMBO (News 1st); Sri Lanka's Finance Ministry has reported notable improvements in its fiscal performance for 2024. 

This progress is particularly relevant in the context of the ongoing International Monetary Fund (IMF) Extended Fund Facility (EFF) program, which aims to support the country’s economic recovery and structural reforms.

The government has projected a budget deficit of Rs. 2,851 billion for the fiscal year 2024, which includes a Rs. 450 billion allocation for bank recapitalization. 

This was revealed in the Pre-Election Budetary Position Report - 2024 issued by the Finance Ministry.

In the first eight months of 2024, the budget deficit was recorded at Rs. 911 billion, marking a significant reduction from the Rs. 1,470.7 billion deficit recorded during the same period in 2023.

The primary balance also showed notable improvement, reaching Rs. 648.8 billion in the first eight months of 2024, compared to Rs. 55 billion in the same period of 2023.

In the first six months of 2024, the primary balance was 3.7 percent of GDP, indicating that government finances are on track to achieve the primary balance target of 1.0 percent set under the second review of the IMF-EFF programme.

To finance the estimated budget deficit, the government planned to borrow Rs. 2,851 billion on a net basis, with Rs. 726 billion from foreign sources and Rs. 2,125 billion from domestic sources.