<p>Sri Lanka's president is set to slash expenditure when he presents an interim Budget on Tuesday to see the crisis-ridden country through the rest of the year, amid discussions with the International Monetary Fund on a bailout package.</p>.<p>The tourism-dependent nation of 22 million is facing its worst economic crisis since independence in 1948, with foreign exchange reserves crashing, public finances in a mess and the costs of basic goods rocketing.</p>.<p>Having become president after his predecessor was ousted in a popular uprising in July, Ranil Wickremesinghe told <em>Reuters</em> earlier this month that the interim budget would focus on fiscal consolidation measures agreed with the IMF.</p>.<p><strong>Also Read — <a href="https://www.deccanherald.com/international/world-news-politics/accused-of-trampling-lanka-s-sovereignty-india-blames-china-s-debt-driven-agendas-for-sl-crisis-1140020.html" target="_blank">Accused of trampling Lanka’s sovereignty, India blames China’s 'debt-driven agendas' for SL crisis</a></strong></p>.<p>He said that expenditure would be slashed by a "few hundred billion" rupees, including on defence, to channel funds for welfare and to repay interest on loans. Sri Lanka aimed for 3.9 trillion rupees ($10.99 billion) expenditure in its last budget, presented in November.</p>.<p>Wickremesinghe, who is also the finance minister, is expected to outline measures to support low income communities worst hit by the financial crisis and announce fresh taxes to shrink a double digit deficit.</p>.<p>A full-year budget for 2023 is likely to be presented in November, where a broader recovery plan will be outlined.</p>.<p>"The interim budget will likely aim for a 9.9 per cent deficit for 2022, which is lower than the earlier 12 per cent," said Lakshini Fernando, macroeconomist at investment firm Asia Securities.</p>.<p>"But expenditure and revenue targets will be difficult to achieve given the cooling economy and welfare demands."</p>.<p>The island nation missed interest payments due on June 3, June 28, and July 18, and a principal payment due on July 25, according to rating agency S&P Global.</p>.<p>An IMF team that arrived in the country last week concludes its visit on Wednesday, with Sri Lankan officials saying they expect to have a staff-level agreement in place to advance talks for an emergency loan of around $3 billion.</p>.<p>The IMF team has also discussed restructuring Sri Lanka's debt of about $29 billion.<br /><br /><em>($1 = 355.0000 Sri Lankan rupees)</em></p>
<p>Sri Lanka's president is set to slash expenditure when he presents an interim Budget on Tuesday to see the crisis-ridden country through the rest of the year, amid discussions with the International Monetary Fund on a bailout package.</p>.<p>The tourism-dependent nation of 22 million is facing its worst economic crisis since independence in 1948, with foreign exchange reserves crashing, public finances in a mess and the costs of basic goods rocketing.</p>.<p>Having become president after his predecessor was ousted in a popular uprising in July, Ranil Wickremesinghe told <em>Reuters</em> earlier this month that the interim budget would focus on fiscal consolidation measures agreed with the IMF.</p>.<p><strong>Also Read — <a href="https://www.deccanherald.com/international/world-news-politics/accused-of-trampling-lanka-s-sovereignty-india-blames-china-s-debt-driven-agendas-for-sl-crisis-1140020.html" target="_blank">Accused of trampling Lanka’s sovereignty, India blames China’s 'debt-driven agendas' for SL crisis</a></strong></p>.<p>He said that expenditure would be slashed by a "few hundred billion" rupees, including on defence, to channel funds for welfare and to repay interest on loans. Sri Lanka aimed for 3.9 trillion rupees ($10.99 billion) expenditure in its last budget, presented in November.</p>.<p>Wickremesinghe, who is also the finance minister, is expected to outline measures to support low income communities worst hit by the financial crisis and announce fresh taxes to shrink a double digit deficit.</p>.<p>A full-year budget for 2023 is likely to be presented in November, where a broader recovery plan will be outlined.</p>.<p>"The interim budget will likely aim for a 9.9 per cent deficit for 2022, which is lower than the earlier 12 per cent," said Lakshini Fernando, macroeconomist at investment firm Asia Securities.</p>.<p>"But expenditure and revenue targets will be difficult to achieve given the cooling economy and welfare demands."</p>.<p>The island nation missed interest payments due on June 3, June 28, and July 18, and a principal payment due on July 25, according to rating agency S&P Global.</p>.<p>An IMF team that arrived in the country last week concludes its visit on Wednesday, with Sri Lankan officials saying they expect to have a staff-level agreement in place to advance talks for an emergency loan of around $3 billion.</p>.<p>The IMF team has also discussed restructuring Sri Lanka's debt of about $29 billion.<br /><br /><em>($1 = 355.0000 Sri Lankan rupees)</em></p>