The upcoming fiscal blueprint targets a 2.6 per cent primary surplus and an overall budget deficit of 4.5 per cent of gross domestic product in 2027. While foreign reserves have climbed to $6.9 billion following 12 consecutive quarters of growth, rising inflation reached 8.3 per cent in October. To protect citizens from soaring power and fuel prices linked to conflict abroad, Colombo is implementing state subsidies and direct cash assistance. Passing this budget will also complete the IMF's seventh review, opening the door for Sri Lanka to issue international bonds for the first time since 2019.
Key points
The government is balancing strict fiscal targets with power subsidies and targeted cash…: The government is balancing strict fiscal targets with power subsidies and targeted cash assistance to counter an 8.3 per cent inflation rate.
Sri Lanka aims to use the 2027 budget framework to re-enter international sovereign bond…: Sri Lanka aims to use the 2027 budget framework to re-enter international sovereign bond markets for the first time since 2019.
Economists warn that projected foreign bond market borrowing rates between 11 and 12 per…: Economists warn that projected foreign bond market borrowing rates between 11 and 12 per cent could plunge the nation back into unsustainable debt.
Sources checked by our analysis pipeline: 1
COLOMBO, Nov 6 : Sri Lanka will use next week's budget to convince investors its economic recovery can outlast a four-year International Monetary Fund bailout that is nearing an end, while trying to revive growth and cushion households from surging energy prices.
President Anura Kumara Dissanayake, who also holds the finance portfolio, will present the budget for 2027 on November 12, laying the groundwork for the island nation's return to bond markets after exiting a $2.9 billion IMF programme in March.
His challenge will be to shift the economy from crisis-era stabilisation towards stronger investment and growth without undermining the fiscal discipline that helped pull the country back from its worst economic crisis in decades.
Sri Lanka's turnaround since 2022 has been stark.
It went from running out of foreign exchange, struggling to import fuel, food and medicines and defaulting on its foreign debt to rebuilding reserves and recording sustained economic growth.
The economic collapse also triggered mass street protests that forced then-President Gotabaya Rajapaksa to flee the country and resign after demonstrators stormed his official residence, bringing an abrupt…
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