Budget 2026: Reform with fairness – A vision for stability, trust, and growth

THE 2026 Budget, presented by President and Finance Minister Anura Kumara Dissanayake, comes at a defining moment in the country's post-crisis transformation.

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President and Finance Minister Anura Kumara Dissanayake delivering the 2026 Budget in Parliament

Three years after the economic collapse of 2022, Sri Lanka's path has shifted from emergency stabilisation toward cautious reconstruction. Budget 2026 represents both a continuation of structural reform and a recalibration of social priorities — an attempt to balance fiscal responsibility, social protection, and long-term competitiveness.

I. The economic context: From stabilisation to sustainable recovery

The Sri Lankan economy, after enduring contraction and external default, has begun to show signs of revival under a tightly managed IMF Extended Fund Facility (EFF) program. Inflation has declined, the rupee has stabilised, and foreign reserves have moderately strengthened. However, debt service commitments remain heavy, and fiscal space is constrained.

Against this backdrop, the 2026 Budget must walk a tightrope — sustaining primary surpluses and debt restructuring commitments, while delivering visible relief to a population fatigued by austerity and rising living costs.

The budget's fiscal framework projects:

■Total revenue and grants: Rs. 5,300 billion

■Tax revenue: Rs. 4,910 billion (14.2% of GDP)

■Total expenditure: Rs. 7,057 billion (20.5% of GDP)

■Budget deficit: Rs. 1,757 billion (5.1% of GDP)

■Primary surplus: 2.5% of GDP

These numbers reveal cautious optimism. The Government expects incremental revenue gains while controlling expenditure within disciplined parameters. Importantly, capital investment is raised to 4% of GDP, signaling intent to rebuild economic capacity, not merely manage short-term liabilities.

II. Fiscal policy direction: Discipline anchored in development