Government faces new spending pressure amidst COVID-19
View(s):In the wake of a possible second wave of COVID-19, fresh financial support for public health services, households and businesses will add new spending pressures for the government amid lower revenue collection in 2020.
This will increase the fiscal deficit, amidst the already high public debt and external refinancing needs, Finance Ministry sources revealed.
The current account deficit is expected to widen to 2.8 per cent of GDP in 2020 before falling to 2.6 per cent in 2021, Treasury data showed.
However, the drop in imports reflecting the reduction in global oil prices and energy demand, and restrained domestic demand will help to tackle the situation up to a certain extent.
The country’s health services is being maintained with a sum of Rs. 76 billion allocated for September-December period from the recent vote on account but this could rise owing to increasing number of infections. In such a case, the Health Ministry would have to present a supplementary estimate in Parliament for extra funds.
From March to date, the cost of preparedness and response to sporadic cases of COVID-19 is estimated at Rs. 98.billion.
In order to grant relief of Rs.5000 each for the affected people in Minuwangoda and Divulapitiya clusters in the Gampaha district, a sum of around Rs. 1.62 billion is needed at present, provisional estimates revealed.
But if relief is to be provided for all the people in the Gampaha district which has been placed under a 3-day curfew, this amount will be increased to at least Rs.11.52 billion.
(BS)