Sri Lanka’s Finance Ministry has reported significant improvements in its fiscal performance for 2024, particularly in the context of the ongoing International Monetary Fund (IMF) Extended Fund Facility (EFF) program, which supports the country’s economic recovery and structural reforms.
According to the Pre-Election Budgetary Position Report – 2024, the government has projected a budget deficit of Rs. 2,851 billion for the year, including a Rs. 450 billion allocation for bank recapitalization.
In the first eight months of 2024, the budget deficit stood at Rs. 911 billion, a marked decrease from the Rs. 1,470.7 billion deficit recorded during the same period in 2023.
The primary balance also showed a substantial improvement, reaching Rs. 648.8 billion in the first eight months of 2024, compared to Rs. 55 billion in 2023.
For the first half of 2024, the primary balance was 3.7% of GDP, indicating that government finances are on course to meet the IMF-EFF program’s primary balance target of 1.0%.
To finance the estimated budget deficit, the government plans to borrow Rs. 2,851 billion, with Rs. 726 billion sourced from foreign lenders and Rs. 2,125 billion from domestic sources.
