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Govt. in balancing act between social welfare and fiscal stability with Budget 2023
Ahead of today’s budget presentation, the government yesterday disclosed plans to prop up State expenditure by 29.2 percent to provide relief to the economically-battered population while
moving towards fiscal stability and expecting a gradual economic recovery.
State Minister of Finance Ranjith Siyambalapitiya yesterday said that all preparations are made to present the 2023 budget with an expenditure of Rs.7.88 trillion.
However, he noted that the fiscal deficit will be contained at Rs.1.78 trillion.
Earlier, the government had announced to cut the fiscal deficit to 6.8 percent of GDP in 2023 from a projected 9.9 percent in line with the 2023-2025 medium-term fiscal policy framework endorsed by the IMF.
According to Siyambalapitiya, more than half of the State expenditure amounting to Rs.4.2 trillion is set be allocated for loan repayment and interest payments, followed by recurrent expenditure amounting to Rs.2.44 trillion, which includes salary and pension payments of public sector workers coupled with subsidies.
He highlighted that the government would be trimming down the defence budget for the first instance in years in order to strengthen the social safety net.
Accordingly, the government is expected to allocate Rs.572 billion for social safety net programmes initially while increasing the expenditure on public education and health to Rs.432 billion and Rs.410 billion respectively.
Meanwhile, the government plans to allocate Rs.1.22 trillion as capital expenditure and a significant chunk of it is set to go towards settling pending arrears worth billions to contractors for completed projects.
In conclusion, Siyambalapitiya stressed that in 2023 Sri Lanka would begin the path towards gradual economic recovery.
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