Sri Lanka is attempting to sustain economic growth while maintaining macroeconomic stability despite the rising inflation government expenditure, and unemployment amidst revenue decline.
Budget deficit and market liquidity deficit along withgovernment debt increased increased by the end of 2019 signalling a difficult econpmic path ahead in 2020 .
During the year up to 03rd January 2020 the Sri Lanka rupee appreciated against the US dollar (0.1%). The gross official reserves were estimated at US dollars 7,520.5 mn as at 29th November 2019
In nominal terms, outstanding central government debt increased to Rs. 12,863.5 bn by end August 2019 from Rs. 11,977.5 bn at end 2018.
Accordingly, total outstanding domestic debt increased by 8.4 per cent to Rs. 6,523.6 bn, and the rupee value of total outstanding foreign debt increased by 6.4 per cent to Rs. 6,339.9 bn by end August 2019
The year-on-year CCPI headline inflation increased to 4.8 per cent in December 2019 from 4.4 per cent in November 2019, Central Bank in its weekly reort on economic indicaors revealed.
Month on month basis CCPI increased by 0.5 per cent in December 2019. The unemployment rate increased to 5.1 per cent, while the labour force participation rate (LFPR) increased to 52.2 per cent in the third quarter 2019.
The total outstanding market liquidity was a deficit of Rs. 16.691 bn by end of the week, compared to a deficit of Rs.4.307 bn by the end of last week.
During the first nine months of 2019, government revenue as a percentage of estimated GDP declined to 9.1 per cent from 9.8 per cent recorded in the corresponding period of 2018.
During the same period, total expenditure and net lending as a percentage of estimated GDP remained unchanged at 14.0 as recorded in the corresponding period of 2018.
During the same period, overall budget deficit as a percentage of estimated GDP increased to 4.9 per cent from 4.1 per cent recorded in the corresponding period of the previous year.
In financing the budget deficit, domestic financing increased to 3.8 per cent of estimated GDP compared to 2.2 per cent of GDP in the corresponding period of 2018, while foreign financing as a percentage of estimated GDP declined to 1.1 per cent from 1.9 per cent recorded in the corresponding period of 2018.
(LI)