Sri Lankan president presents budget aimed at stemming the crisis

Sri Lankan President Ranil Wickremesinghe on Tuesday presented an interim budget aimed at stemming the country’s worst financial crisis in decades.

Here are highlights from the budget speech by Wickremesinghe, who is also the country’s finance minister. IMF

* Wickremesinghe says talks with IMF ‘have reached a fruitful level’ * Says he hopes to start talks with creditors

* After the end of the IMF program, decisions will be presented to Parliament TARGETS

* Target mid-single-digit inflation * Target medium-term economic growth of 5%

* Target to increase government revenue to 15% of GDP by 2025 from 8.2% * Aim for a stable economy by 2026

* Aim to bring the debt-to-GDP ratio below 100% in the medium term REFORMS

* Will encourage FDI and joint ventures to develop Sri Lanka’s natural resources * Loss-making state enterprises will be restructured under a special unit

* New legislation to be introduced to strengthen fiscal management * National Debt Management Agency to be created under the Ministry of Finance

* New laws will be introduced to restructure over-indebted companies in line with US bankruptcy law * Will introduce a trade adjustment program to encourage exports

* Will revive efforts to negotiate free trade agreements * Policies will be introduced to encourage renewable energy

BANKING/TAXATION * VAT increased to 15% instead of 12% from September 1

* New taxes will be introduced in the 2023 budget * A new central bank law will be introduced

* Central bank act to reduce politicization and monetary authority money printing * Plan to increase reserves and reduce exchange rate impact

WELFARE * New system to be put in place to better target social assistance, funds sent directly to bank accounts

* An additional 4.6 billion Sri Lankan rupees ($12.85 million) for social assistance over the next four months

* $110 million allocated for urea imports for rice farmers * $70 million allocated to purchase cooking gas imports ($1 = 358,0000 Sri Lankan rupees)

(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)

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