Sri Lanka’s President Ranil Wickremesinghe, who is also the Finance Minister, presented the 2023 budget on Monday. The proposed budget aims to increase tax revenues by 69% to $8.6bn whilst bringing down the budget deficit to 7.9% from this year’s revised 9.8%. Several other medium-term targets were laid out, including increasing international trade as a percent of GDP by over 100%, growing annual new exports by $3bn over the next 10 years and attracting $3bn via foreign direct investment over the same period. On borrowings, he said that debt will be reduced to less than 100% of GDP over the medium-term. Broadly, Wickremesinghe said that the proposed budget policies were not limited to IMF recommendations only, adding that the economy can turnaround by end-2023. While the island nation secured a staff-level agreement with the IMF in early September, it needs to get financing assurances from creditors including China and Japan to secure disbursements.

Sri Lanka’s dollar bonds inched up only slightly with its 6.85% 2025s up 1.25 points to 26.25 cents on the dollar currently.

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