(Updates with inflation forecast)
COLOMBO, Nov 8 (Reuters) - Sri Lankan President Mahinda Rajapaksa on Thursday began presenting the 2013 budget to the island nation’s parliament.
Following are some highlights of the budget:
Economic growth is forecast at 7.5 percent for 2013, against a forecast of 6.8 percent for this year. Sri Lanka posted record growth of 8.2 percent in 2011, but the economy has slowed as a result of tight monetary and fiscal policies adopted to curb the country’s fiscal and external deficits. Rajapaksa said growth should return to 8.0 percent annually after 2013.
Inflation is exepected to slow to 7 percent in 2013, based on money supply growth of 14 percent and favourable food supplies. Inflation in October was running at 8.9 percent from a year earlier.
The government aims to reduce the fiscal deficit to 5.8 percent of the gross domestic product in 2013 and 4.5 percent in 2015, after meeting a target of 6.2 percent for 2012.
Sri Lank has been reducing its fiscal deficit under the terms of a loan agreement with the International Monetary Fund. The deficit has fallen from 6.9 percent in 2011 and 8.0 percent in 2010.
Rajapaksa said the government aimed to reduce Sri Lanka’s debt to GDP ratio to 75 percent in 2012 from an estimated 78.5 percent this year.
The president said measures would be taken to encourage exports and discourage imports to reduce a balance of trade deficit and increase foreign exchange reserves. (Reporting by Shihar Aneez and Ranga Srilal; Editing by Simon Cameron-Moore)