The International Monetary Funds (IMF) on Wednesday expressed concerns over Sri Lanka’s fiscal deficit in 2015, after the new government raised wages and increased spending since taking power in January, Reuters reported.
The 2015 deficit target of 4.4% of gross domestic production (GDP) "will likely be very difficult to reach even with relatively optimistic assumptions regarding revenue gains", the body said.
"In the absence of new measures to create a more durable increase in tax collection, revenues in 2016 will drop as the one-off measures expire, while the permanent increase to recurrent spending from the revised 2015 budget will likely push the deficit higher," the IMF said in a statement.
Sirisena’s government has changed several policies, including reducing import taxes on some commodities and fuel prices, and introduced a one-off super gain tax to raise revenue by Rs80.3bn while increasing recurrent spending by nearly 6% or an extra Rs87bn ($652.66 million).