World Bank upbeat about Budget 2014-Basil

Basil Rajapaksa

By Rasika Jayakody

Although budget 2014 is gravitated towards welfare, international funding organizations have already expressed positive sentiments about key budget proposals, Economic Development Minister Basil Rajapaksa told The Sunday Leader.

Budget deficit has been brought down to 5.2% and that meets everyone’s expectations, the Minister added.

“I met the World Bank representative who was present in Parliament during the budget speech and she was of the view that budget 2014 has addressed every sector that has to be addressed,” Rajapaksa said, on the sidelines of the tea-party hosted subsequent to the budget speech.

“More money has been allocated for health and education sectors and a focus has been given to resolve the drinking water problem faced by some sections of the country,” The Minister said.

IMF Deputy Managing Director Naoyuki Shinohara, commenting on the present state of affairs in Sri Lanka’s economy told the media last week that a lower deficit would reduce the need for future foreign borrowings.

While saying Sri Lanka had room to strengthen its external position and foreign reserves, he also added that a slowing external environment could also slow exports in the future. President Mahinda Rajapaksa in his budget speech, expressed confidence that the budget deficit would go further down in 2015 and stand at 4.5%.

“We are determined to bring down the budget deficit to 3.8% by 2016 and reduce our debt /GDP ratio to 65%,” he said. Budget deficit, according to the President, stands at 5.2% of GDP in 2014.  Commenting on the matter, economist and UNP Parliamentarian Dr. Harsha de Silva said this was nothing but a “neo-liberal” budget. When asked whether he views it as a negative sign, the Parliamentarian quipped saying, “You should ask that from them. They don’t admit their budget is neo-liberal.

Technically, they have cut down on relief and concessions, attempting to meet the budget deficit”. Oposition Parliamentarian Ravi Karunanayake said that painting a rosy picture about the budget deficit by merely increasing the GDP, will have disastrous impacts on the country’s economy in the future.

1 Comment for “World Bank upbeat about Budget 2014-Basil”

  1. R.M.B Senanayake

    It is good that the Government is committed to reducing the budget deficit. But it should not be done by accumulating arrears of payments -by postponing payments to the next financial year when the ratio of budget deficit to GDP tends to jump above the limit. This will bring about a recession in the economy for the Treasury is breaking up the credit cycle on which the economy operates.

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