Reformist Budget: CT CLSA

Tuesday, 24 November 2015 01:29 - - {{hitsCtrl.values.hits}}

Leading stock broking firm CT CLSA has described the 2016 Budget as reforms driven which was a welcome departure from past ones of populist nature.

In its 2016 Budget analysis report titled ‘Sri Lanka - Third Wave of Reforms’, the CT CLSA, which is the number one broker on foreign turnover, said, “National Budget Proposals 2016 can be termed as a reformist agenda.”

“Being used to budget speeches that were extremely populist, or included implausible/regressive proposals, the proposals presented on 20 November 2015, though falling short of being ‘revolutionary’ as promised in the lead up, look to adequately address the short term risks in the economy, whilst setting Sri Lanka up for the long run,” it added.

The report also said the proposals look to instill confidence amongst the investment community. Overall, the proposals appear to have taken note of comments made by a range of stakeholders, whilst comprising a more medium to long term planning perspective.

“Whilst state intervention is likely to remain, or return, in some industries, there seems to be better distinction being made between essential and non-essential involvement,” CT CLSA said.

It said the Government forecasts the fiscal deficit for 2016E to decline to 5.9% of GDP (Rs. 740 b), against a deficit of 6.0% (Rs. 675 b) targeted for 2015E (surpassing previous target of 4.4%, or Rs. 499 b)

Total revenue and grants to rise at a staggering +39% YoY to Rs. 2,047 b in 2016E. GoSL estimates total expenditure to increase +29% YoY to Rs. 2,787 b in 2016E, with Public Investment to rise +68% YoY to Rs. 868 b.

FT will carry a longer version of CT CLSA report later in the week.