Sri Lanka’s fiscal performance exceeds mid-year target
The Morning: Sri Lanka’s Committee on Public Finance (CoPF) was informed by Finance Ministry officials that the national fiscal performance in the first half of 2025 has surpassed total revenue in the same period in 2024 – surpassing the mid-year target, a statement released by the CoPF said.
“Accordingly, the Sri Lankan government has reported a strong fiscal performance for the first half of 2025 compared to the total revenue for the first six months of 2024, exceeding the mid-year target, officials from the Ministry of Finance informed the Committee,” the statement said.
Presenting data, Finance Ministry officials pointed out that the total revenue collected from the half-yearly estimated income of Rs. 2,241 billion from January-June was Rs. 2,318 billion, which exceeded the half-yearly estimate by 3%.
Meanwhile, the total government expenditure in the first half of 2025 was Rs. 3,467 billion, an increase of Rs. 367 billion compared to the expenditure in the first six months of 2024.
The main reason for this increase has been debt servicing, which was Rs. 1,984 billion in the first half of 2025. Recurring expenditure on essential public services, including public sector salaries, pensions, social security programmes such as ‘Aswesuma’ and ‘Samurdhi’, has also increased, Finance Ministry officials said.
Furthermore, the Sri Lanka Customs Department has recorded a revenue of Rs. 996 billion between January-June, recording a growth of 47% compared to the year 2024 (January-June). The revenue received from the import of automobiles contributed significantly to this growth, which had received Rs. 429 billion.
The Inland Revenue Department (IRD) also reported an increase, reporting an income of Rs. 1,040,388 million out of the estimated income of Rs. 1,022,691 million in the first half of 2025. Here, the departmental officials pointed out that TIN (Tax identification number) numbers have been issued for about 1.3 million Sri Lankans over the age of 18.
OSL take:
The strength, resilience and growth shown by Sri Lanka’s economy, especially after facing an unprecedented economic crisis in 2022, serves as a confidence booster to foreign businesses/investors to explore the expanding business/investment opportunities in key economic sectors in the country. Sri Lanka has through the years shown great resilience to external as well as internal economic shocks. Supported by the country’s geographical positioning in the Indian Ocean, many trade agreements as well as trade concessions and an improving ease of doing business environment in the country, Sri Lanka is currently on the path to becoming a hub in the South Asian region. Sri Lanka’s growing fiscal performance and the expanding economic activities have resulted in many foreign countries also placing the country prominently in their economic expansion programmes like China’s Belt and Road Initiative (BRI). Given the strong economic performance of the country and the growth, profits as well as expansions recorded by businesses in Sri Lanka, foreign businesses/investors could confidently explore the expanding business/investment opportunities in Sri Lanka. Foreign businesses could also look at further expanding operations through collaborations with local businesses.
| Article Code : | VBS/AT/20250918/Z_1 |