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UPDATE 2-Sri Lanka sees budget deficit falling, but strain on economy remains

Mount Equity Group Tokyo, Japan > News > Markets > UPDATE 2-Sri Lanka sees budget deficit falling, but strain on economy remains

(Updates throughout)

COLOMBO, Nov 12 (Reuters) – The Sri Lankan government will reduce the budget deficit to around 8.8% of gross domestic product in 2022, finance minister Basil Rajapaksa said in his budget speech on Friday, though it missed its deficit target for 2021.

The government will also roll out a goods and services tax announced in the 2021 budget from January 2022, the minister said.

“We are living through history’s most challenging period in terms of people’s lives, livelihoods, sources of income, and job security,” said Rajapaksa, whose brother, Gotabaya Rajapaksa, is the island nation’s president.

“I strongly believe that, even amidst these challenges, we are equipped with all the necessary strengths to manage the economy and to overcome such challenges.”

The new projected 11.1% budget deficit for 2021 is higher than the 9.5% target set by the government in June which itself was revised up from 8.9%.

“This…

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