The Sri Lankan authorities have adopted the country's budget for 2024, increasing spending on social assistance to the population and development plans of the republic. The project approved by the Government was presented in Parliament by President Ranil Wickramasinghe.
"In the conditions of a deep economic crisis, we managed to increase tax revenues by 50% in the first six months of the year. Inflation, which skyrocketed to 70% in September 2022, dropped to 1.5% and in October 2023. Foreign exchange reserves increased from zero to 3.5 billion US dollars. The trust placed in us by foreign countries has been restored. However, we have a long way to go," the President said, acknowledging that progress has been achieved at the moment thanks to the sacrifices of the people.
"The government will gradually create conditions to alleviate these difficulties. We strive to provide more opportunities and benefits as our economy recovers and stabilizes. We cannot return ourselves to the hell our country was in in 2022," Wickramasinghe pointed out.
As the president acknowledged, "some call this budget an electoral budget." "The reason is the presidential and general elections, which are scheduled for next year," he explained, assuring that the current authorities do not intend to bribe voters with higher salaries and benefits, seeking to ensure the future of the country.
The government has set a budget deficit target of 2.85 trillion Sri Lankan rupees ($8.7 billion) in 2024, higher than the revised 2.4 trillion rupees ($7.3 billion) this year. It is planned that next year the deficit will be 9.1% of GDP, compared with 8.5% in 2023.
The allowance for 1.3 million civil servants will be increased from 7800 to 17,800 Sri Lankan rupees (24-54 US dollars) from January 1, 2024. The subsistence minimum for 730 thousand pensioners will be increased to 6,500 rupees (almost $ 20) from April 1, 2024. It is also planned to restore the program of issuing loans in case of natural disasters for civil servants and increase deductions for the program "Widows and orphans" to 8%.
Sri Lankan authorities also intend to invest in the development of green energy, expansion of infrastructure and tourist attractiveness of the country, including the construction of an international airport and highways. Funds will be allocated for the dissemination of education in English. According to Wickramasinghe, Sri Lanka will sign an agreement on economic and technological cooperation with India and a free trade agreement with China.
The Sri Lankan Parliament will consider the government's budget proposals in the second reading this week. A vote will be held on November 21.
Sri Lanka is struggling with the worst economic crisis since independence in 1948. It is caused by a reduction in foreign tourism due to the pandemic, which led to a shortage of the country's foreign exchange reserves. Under these conditions, the Sri Lankan authorities were forced to reduce imports and introduce strict economy of resources. Sri Lanka has a great need for cement, car parts, fuel, products. Sri Lanka's economy has been showing signs of recovery recently, helped by a $2.9 billion bailout from the International Monetary Fund (IMF).
