News
PM pledges to reduce budget deficit from 10% to 4% by 2025
By Saman Indrajith
Prime Minister Mahinda Rajapaksa yesterday (12) asked Parliament to increase the borrowing limit by Rs.180 billion while amending the guarantee limit to 15 percent of the GDP as stated in the Fiscal Management (Responsibility) Act.
Presenting the Appropriation Bill 2020 to the House, the Premier said that the government aimed to reduce the income-expenditure gap to 4 percent of GDP by 2025 which now stood at nearly 10 percent and to reduce the overall debt to GDP to 75 percent of GDP within the next four years.
“It has become a national need to change our mindset to have faith in a production economy that supports exports and domestic production capabilities with fewer imports. A market economy that is dependent only on tea and apparels, with imports which are twice our exports without value additions to local resources and raw materials, will not pave the way for sustainable development. Development aspirations of the people could not be met depending only on import-led consumption and industrialisation without focus on food security and agro industrialisation and allied services based on agriculture, fisheries and livestock development. We have to not only convert a negative economy into a positive high economic growth rate of 6 percent, but such growth should result in the eradication of poverty.”
PM Rajapaksa said that the government had already spent around Rs.70,000 million for identifying COVID-19 patients, quarantine, random testing and related welfare activities.
“Hospital capacity for disease prevention, which was limited to Colombo, has now been increased to 17 hospitals in less than a year covering almost all parts of the country. The number of special care beds for COVID-19 patients has been increased to around 600. Daily PCR testing capacity for the diagnosis of the disease has been increased to an average of 7,500-10,000 tests a day with each test costing around Rs. 6,000, with the daily expenditure exceeding almost Rs. 50 million. The government also spends a sizable amount for the food and welfare of those under 14-day quarantine. In the meantime, an allowance of Rs.5, 000 each is granted to low income families adversely affected by the COVID-19 pandemic. Besides, the government is also bearing expenses related to the payment of the allowances of public servants who are engaged in those services in addition to other health-related expenditure.”
“From 2020 onwards annually, foreign debt servicing amounts to approximately USD 4,200 million. I am happy to report to this House that we have settled all debt obligations including the foreign currency debt dues for the year 2020,” he said.
The Premier said that he would present the proposals to create a modern economy in the country through ‘Vistas of Prosperity’ in his budget speech 2021 to be delivered on 17 Nov. 2020.
Prime Minister Dr. Harini Amarasuriya participated in a high-level dialogue titled “Tourism as Soft Power and Diplomatic Capital” held at the Euronews Hub, Piz Buin Davos, on the sidelines of the World Economic Forum on January 20.
The session explored how tourism functions as a strategic instrument of diplomacy by strengthening international trust, cultural exchange, and regional cooperation through mobility and people-to-people engagement. The Prime Minister shared the panel with Mr. Kuban Omiraliyev, Secretary General of the Organization of Turkic States and Mr. Meshari Alnahar – CEO Aseer Investment Company, Saudi Arabia.
Addressing global trends, the Prime Minister emphasized that Sri Lanka is an example of hope, recovery and resilience in a world of conflict demonstrating how tourism can play a critical role in a changing global environment particularly amid climate shocks, geopolitical instability, and uneven economic recovery. She noted that tourism is not only an economic sector but also a vital diplomatic bridge that supports livelihoods, builds relationships and connects people.
Drawing on Sri Lanka’s recent experience, she highlighted the country’s strong tourism recovery despite multiple crises, including the impact of Cyclone Ditwah. Transparent crisis management and strategic engagement with international partners helped sustain visitor confidence, resulting in record tourist arrivals even in challenging circumstances.
The Prime Minister also underscored the importance of green and climate friendly tourism infrastructure and underlined that Sri Lanka welcomes long term investment in tourism. She pointed out that tourism supports millions of jobs worldwide and that inclusive policies are essential to ensure fair opportunities, particularly for women and vulnerable communities.
[Prime Minister’s Media Division]
During an operation conducted in the dark hours of 20 Jan 26, the Sri Lanka Navy seized two (02) Indian fishing boats and apprehended seven (07) Indian fishermen while they were poaching in Sri Lankan waters, off Kovilan, Jaffna.
The seized boats and Indian fishermen was to be handed over to the Fisheries Inspector of Myliddy, Jaffna for onward legal proceedings.
Prime Minister Dr. Harini Amarasuriya participated in a series of high-level bilateral meetings on January 20 on the sidelines of the 56th Annual Meeting of the World Economic Forum in Davos-Klosters, Switzerland.
The Prime Minister attended a productive bilateral meeting with Mr. Jozef Síkela, European Commissioner for International Partnerships. During the discussion, both sides focused on strengthening Sri Lanka–EU cooperation and advancing mutual interests.
Prime Minister Amarasuriya also met with Mr. Masato Kanda, President and Chairperson of the Board of Directors of the Asian Development Bank (ADB), at the WEF Congress Centre. The meeting provided an opportunity to discuss ongoing engagement and future collaboration between Sri Lanka and the ADB.
In addition, the Prime Minister held discussions with Mr. Hassan El Houry, Chairman of Menzies Aviation, where opportunities for collaboration in aviation services and connectivity were explored.
The Prime Minister also participated in a high-level dialogue at the Global Tourism Forum held at the Euronews Hub, Piz Buin, Davos, as part of the World Economic Forum engagements.
Dr. Anil Jayantha, Minister of Labour, and the Deputy Minister of Finance were also present at these meetings.
[Prime Minister’s Media Division]
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