President and Finance Minister Anura Kumara Dissanayake Overall Budget records Rs. 197.3 b surplus vs. Rs. 236.6 b deficit a year earlier Revenue and grants increase 30.6% YoY to Rs. 2.54 t Tax revenue rises 23.9% to Rs. 2.32 t, while non-tax revenue jumps 54.2% Primary surplus…

President and Finance Minister Anura Kumara Dissanayake

Overall Budget records Rs. 197.3 b surplus vs. Rs. 236.6 b deficit a year earlier Revenue and grants increase 30.6% YoY to Rs. 2.54 t Tax revenue rises 23.9% to Rs. 2.32 t, while non-tax revenue jumps 54.2% Primary surplus expands 52.3% YoY to Rs. 1.13 t Expenditure grows a modest 7.3%, with capital spending up 29.3%

Sri Lanka’s fiscal position strengthened further during the first five months of 2026, with the Government posting an overall Budget surplus of Rs. 197.34 billion, reversing a deficit of Rs. 236.63 billion in the corresponding period last year as revenue growth continued to significantly outpace expenditure. According to the latest fiscal operations data released by the Central Bank of Sri Lanka (CBSL), total revenue and grants increased by 30.6% year-on-year (YoY) to Rs. 2.54 trillion during the January-May period from Rs. 1.94 trillion a year earlier.

Tax revenue, which accounted for the bulk of Government income, rose 23.9% to Rs. 2.32 trillion from Rs. 1.8 trillion in the corresponding period of 2025. Non-tax revenue recorded an even stronger growth of 54.2% to Rs. 211.84 billion from Rs. 137.38 billion, while grants declined to Rs. 1.34 billion from Rs. 2.49 billion. Meanwhile, expenditure and lending minus repayments increased by 7.3% YoY to Rs. 2.34 trillion from Rs. 2.18 trillion, reflecting continued expenditure discipline despite higher public investment. Recurrent expenditure rose 5.5% to Rs. 2.11 trillion, while capital expenditure and lending minus repayments climbed 29.3% to Rs. 226.83 billion from Rs. 175.37 billion in the same period last year. The primary balance, a key fiscal indicator monitored under Sri Lanka’s International Monetary Fund (IMF)-supported reform program, improved to a surplus of Rs. 1.13 trillion during the first five months of the year, compared with Rs. 742.92 billion in the corresponding period of 2025, representing an increase of 52.3%. The latest figures underscore continued improvement in public finances, with stronger revenue mobilisation enabling the Government to maintain sizeable primary and overall Budget surpluses while increasing capital expenditure during the period. According to the IMF’s latest assessment, following temporary fiscal easing in 2026, the Government remains committed to restoring the primary surplus target to 2.3% of GDP in 2027 to safeguard macroeconomic stability. The IMF said efforts to strengthen tax compliance, broaden the tax base, and improve public financial management should continue, while calling for faster execution of public spending, including disaster-related support. It also urged accelerated State-owned enterprise reforms, continued cost-reflective energy pricing, and stronger social safety nets to contain fiscal risks. The IMF further stressed the need to strengthen the Public Debt Management Office as debt restructuring nears completion to support prudent debt management, deepen the domestic debt market, and facilitate Sri Lanka’s eventual return to international capital markets.