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Minister Bandula Gunawardena Emphasizes Adherence to IMF Loan Agreements Until 2028

Sri Lankan Minister Bandula Gunawardena emphasized the necessity of adhering to the loan agreements with the International Monetary Fund (IMF) until 2028 while formulating the budget for 2025, regardless of the governing administration. He also highlighted the obligation for political parties aspiring to assume state power to disclose their compliance with these agreements to the country.

Amid ongoing protests and strikes by several political parties, a committee comprising the Secretary to the President and the Secretary of the Ministry of Finance has been established to address salary discrepancies across government departments, corporations, and statutory bodies. The Cabinet has decided to propose solutions and incorporate them into the 2025 budget document, according to the President’s Media Division.

Minister Gunawardena noted that despite various governmental needs, the 2024 budget cannot accommodate additional financial allocations. He pointed out that for over four decades, the government has not generated sufficient income to cover its day-to-day operational expenses.

In 2023, the Inland Revenue Department collected Rs. 1,550 billion by raising all tax types, while the Department of Customs garnered Rs. 923 billion from import and export duties. The Excise Department gathered Rs. 169 billion, and the Department of Motor Traffic obtained Rs. 20 billion. Non-tax income amounted to Rs. 219 billion. Additionally, Rs. 16 billion came as aid, and Rs. 304 billion was collected through various deposits, summing up to a total income of Rs. 3,201 billion. However, these revenues had to cover government operations, including salaries, pensions, subsidies like “Samurdhi” and “Aswasuma,” and loan interest, resulting in a total expenditure of Rs. 4.3 trillion in 2023.

Minister Gunawardena stressed that any government formulating the budget for 2025 must address the IMF loan agreements in place until 2028. By 2025, it is anticipated that the external foreign resource gap will not adequately cover international transactions, with a projected need of USD 5018 billion.

To secure this funding, the IMF has agreed to provide USD 663 million under the extended credit facility, and an additional USD 700 million to address the budget deficit. The World Bank and the Asian Development Bank (ADB) have pledged USD 400 million and USD 300 million, respectively. Loan relief of USD 3655 million is also anticipated through the restructuring of foreign debt.

Furthermore, Minister Gunawardena emphasized that parties aspiring to state power must inform the country if they are abiding by the agreements outlined by President Ranil Wickremesinghe, who is also the Finance Minister. He stressed that there is no alternative for the future budget of the country, even if pursued without expecting international cooperation.

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