Janet Mason 
* Finance Minister sets ambitious monetary deficit goal
* Allowance for public servants, pensioners, militia
* Growth is anticipated to improve from a 17-year low
* Sri Lanka to maintain polls later in 2019, next year (Adds detail, comment)
By Shihar Aneez and Ranga Sirilal
On Tuesday, COLOMBO, March 5 (Reuters) – Sri Lanka boosted spending on country personnel, pensioners, and the militia and promised many rural infrastructure tasks in a 2019 budget range to woo voters before two elections, following a period of political instability. Finance Minister Mangala Samaraweera raised taxes on the tourism region, vehicles, liquor, and cigarettes to satisfy the authorities’ spending before a presidential election later this year and a popular election in 2020.
“We will make extra investments in social infrastructure and a social protection net,” Samaraweera told the parliament while delivering the budget with the subject of “Enterprise Sri Lanka – Empowering the People and Nurturing the Poor.” he brought a different allowance for all public sector employees and revised bills for pensioners. Public zone people and pensioners account for 15 percent of the electorate. Samaraweera additionally promised many rural infrastructure projects and to protect low-income earners.
Through Prime Minister Ranil Wickremesinghe, the government has come under heavy criticism for higher taxes and tight economic and monetary policies that have crimped growth to a 17-year low and brought about a sharp fall in the rupee. Wickremesinghe was reinstated as the Prime Minister after a 51-day political face-off with President Maithripala Sirisena, who had sacked him; however, he was compelled by a court ruling to reinstate him. Samaraweera set an ambitious economic deficit goal of four.4 percent of the gross domestic product (GDP), as compared with five.3 percent in 2018.
/aerial-view-of-sigiriya-rock-at-misty-morning--sri-lanka--drone-photo--1129567907-a6628ce7d636462f9a0e0361a3808178.jpg "UPDATE 1-Sri Lanka boosts spending in price range targeting voters 2")
“Achieving four. A four percent deficit target might be challenging and an uphill undertaking,” said Danushka Samarasinghe, CEO at Softlogic Capital Markets. Trisha Peiris, product head at Frontier Research, stated the budget “appears to target the middle-class segment more while offering numerous mortgage schemes to the lower-income earners.” The authority’s objectives are to boost spending by thirteen percent in 2019 and increase tax revenue by 21 percent. Three percent compared with 2018. Budget files show the authorities plan to borrow 450 billion rupees ($2 2 Million) through foreign business borrowing.
On Friday, the IMF said it had agreed to increase a $1.5 billion mortgage program for an additional year, successfully giving the authorities some room to reinforce spending before the elections. Sri Lanka is suffering from repaying its foreign loans, with a fiscal deficit. Nine billion due this year, consisting of $2.6 billion inside the first three months. It used its reserves to pay off a $1 billion sovereign bond mortgage in January. The government is sticking to a medium-term financial strategy of reducing the deficit to 3. Five percent of GDP by 2020, an IMF goal, which was previously expected to be shifted to 2021.
Tight financial and economic policies, along with intermittent side floods and drought, have brought about growth slumping to a 17-year low of around three percent for the remaining year, even as the rupee fell 16 percent mainly due to overseas outflows from Sri Lankan securities. Samaraweera anticipated this 12 months’ boom to pick up as much as a tempo of three.5 percent. ($1 = 179.00 Sri Lankan rupees) (Reporting by way of Shihar Aneez, Editing by Richard Borsuk, Robert Birsel)
