President Mahinda Rajapaksa will authorize three months of expenditure until July 22, and then a mini-budget will be adopted for the rest of 2010, Treasury Secretary said in an interview with the Reuters yesterday (29 April).

That will give Sri Lanka time to introduce much-needed reforms in the 2011 budget, he said.

"The aim of the (2011) budget is to focus on tax reforms, policies and a regulatory framework that would make Sri Lanka an investor-friendly country," Mr. Jayasundera said.

The Treasure Secretary further said: "Through creation of the economic development ministry, the government has removed a lot of barriers for investors. Approval for security, environment, tax policies, investments...all will be done with one letter now".

"The 7.5 percent budget deficit target should be achieved comfortably as the expenditure would be the same like last year and the revenue is picking up," Jayasundera said. He said economic growth would be close to 7 percent, as earlier forecast.

"The reserves are more than the IMF target. I am optimistic of the IMF releasing both the third and fourth tranche together," he said.

Jayasundara said he expects tourism revenue to grow to $1 billion annually from its present $400 million, and foreign direct investment to boom to $1.5-2 billion annually from around $600 million now.

He said foreign investment inflows should put upward pressure on the rupee currency. "I see a higher probability for appreciation than depreciation," he said.

He said the dollar trading band of 40 cents now would be widened gradually without much pressure to the exchange rate and exporters should prepare to face gradual appreciation, quoting the Secretary Reuters reported.