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Budget on March 18

Colombo, (AFP) — The government last week announced it will unveil its budget for this year on March 18 amid fears that the country is headed for a major debt servicing crisis.

The new government was due to announce new tax measures in its first budget since coming to power after elections on December 5 on a promise to revive the country’s economy which contracted by an estimated 0.7 percent last year.

Debt servicing for the 2002 calendar year was set at 295 billion rupees (3.2 billion dollars) compared to estimated government revenue of 275 billion (2.9 billion dollars), officials said.

It will be the first time that Sri Lanka’s debt servicing exceeds total state revenue, unless new measures are taken to boost government income and cut down on spending, officials said.

Government revenue last year was down by 30 billion rupees (326 million dollars) widening the budget deficit to 10.5 percent of gross domestic product (GDP) compared to the original estimate of 8.5 percent of GDP.


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