Govt. beats fiscal expectations in 2025

Posts record Rs. 1.78 t primary surplus in 2025 Overall Budget deficit narrows sharply to Rs. 724.4 b; just 33% of Rs. 2.2 t Budgeted estimate Revenue and grants rise 35.4% YoY to Rs. 5.5 t, exceeding Budget target Recurrent expenditure reaches 88% of Budgeted estimate Capital spending up 26.7% YoY to Rs. 1 t but below Budget allocation

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SRI Lanka's fiscal position strengthened markedly in 2025, with the Government recording a primary surplus of Rs. 1,776.3 billion, more than 2.7 times the Rs. 649.6 billion surplus reported in 2024, as stronger revenue collection and restrained expenditure significantly reduced the Budget deficit, according to an analysis by JB Securities based on Finance Ministry and Central Bank of Sri Lanka (CBSL) data.

The overall Budget deficit narrowed sharply to Rs. 724.4 billion in 2025, a 64.5% year-on-year (YoY) contraction from Rs. 2,039.9 billion in 2024, while the primary surplus exceeded the Budget estimate of Rs. 757.4 billion by 134.5%, underscoring stronger-thanexpected fiscal consolidation driven by higher tax revenue and tighter control of recurrent spending.

JB Securities noted that the 2025 deficit amounted to roughly 33% of the Rs. 2,192.6 billion shortfall projected in the Budget, indicating a significantly smaller fiscal gap than initially anticipated.