6.2% budget deficit will be met

Tuesday, 1 May 2012 02:25 - - {{hitsCtrl.values.hits}}

Treasury Secretary Dr. P.B. Jayasundera yesterday expressed confidence that the 6.2% budget deficit would be met this year.

“We will strictly adhere to the planned 6.2% budget deficit this year. We will not deviate from the borrowing program as approved by Parliament,” he told journalists.

He said that Government revenue was on track with the shortfall between estimates and actual being only Rs. 2 billion as at 11 April. Expenditure on the other hand had seen an increase of only Rs. 6 billion.

In response to the sharp increase in Government borrowing from the banking sector so far this year, the Treasury Chief said that the rise was seasonal ahead of March-April salary and pension commitments. He noted that the market could not provide such short-term liquidity requirements.

Dr. Jayasundera said that borrowing wasn’t outside the program approved in Parliament, whereas only the composition had changed with greater reliance on banking sector, especially the Central Bank.

He also said that of the Rs. 40 billion raised recently, Rs. 38 billion was paid back in less than a month.

As per Central Bank data, net credit to the Government by February amounted to Rs. 970 billion, up by 50% from a year earlier. In January it was Rs. 927 billion. Net credit from monetary authorities (Central Bank) rose by 231% to Rs. 320 billion from a year earlier and Rs. 288.5 billion in January.