colombo nov 10 reuters  sri lankas new government will release the 2023 budget on monday focused on boosting revenue implementing tax reforms and fiscal consolidation to secure an imf bailout package to help the country recover from its worst financial crisis in decades soaring inflation a weakening currency and low foreign exchange reserves have left the island of 22 million people struggling to pay for import essentials such as food fuel and medicine the budget is also expected to include measures aimed at helping sri lanka restructure its debt as it tries to finalise a 29 billion bailout from the international monetary fund sri lanka owes investors around 30 billion in bilateral and bondholder debt markets will be looking for reforms in the budget for the country to move forward said dimantha mathew head of research at first capital holdings we are hopeful of the imf program being finalised in january and the debt restructuring to be in place from mid2023 president ranil wickremesinghes first fullyear budget since taking office in july comes as sri lanka is struggling with a shrinking economy and global recession fears the world bank estimates sri lankas economy will contract by 92 in 2022 and 42 next year the government has already spelt out proposals to increase personal and corporate income tax to 30 from 24 and possibly change tax brackets to boost revenue despite criticism from corporates and opposition parties however reducing expenditure is likely to be tricky given sri lankas large public workforce and high debt recurrent spending in 2023 is listed at 46 trillion rupees 13 billion in the appropriation bill a precursor for the budget with interest payments seen making up 365 of that expenditure that would amount to 21 billion rupees in interest payments a 55 jump on 2022 levels total spending is expected at 59 trillion rupees in 2023 with capital expenditure likely to make up 209 of that total welfare spending is also seen rising the united nations this week expanded its funding appeal by 70 million to help sri lankas population 28 of which is facing food insecurity sri lankas food inflation reached 856 in october this means the budget deficit will remain at 910 of gdp it will be hard to shrink unless interest rates come down said udeeshan jonas chief strategist at equity research firm cal group sri lankas economy could recover in the latter part of 2023 the central bank said recently adding this would be dependant on policymakers unwavering commitment to implementing policy reforms in a timely holistic and efficacious manner