The President’s 2026 Budget is a strong, forward-looking one — moving the economy from stabilisation to the next phase of growth.
All the macro indicators have turned around and exceeded targets. IMF-led reforms have instilled much-needed fiscal discipline, and importantly, the government has stayed the course without deviation, continuing to push the recovery process.
This budget builds confidence — it focuses on digitisation, AI adoption, SOE reforms, good governance, and bringing the grey economy into the formal sector by widening the VAT and tax nets. It’s about taking ownership of revenue generation and building reserves to meet debt obligations, starting from 2028.
The aim for 7% medium-term growth is ambitious but realistic, given the improving fundamentals. While there are no major incentives, what businesses and markets truly appreciate is stability, continuity, and predictability — the absence of sudden, overnight changes. In that sense, this is a practical and achievable budget.
There’s clear emphasis on infrastructure — roads, highways, airports, housing, bridges, hospitals — which will stimulate both employment and investment. The move from three to four tax bands (0–30%) and increasing direct tax contribution from 25% to 40% supports fiscal sustainability.
To attract FDI, government teams will need to actively engage global investors, showcase the opportunities in Sri Lanka, and fast-track FTAs with key trading partners. Tourism and worker remittances are rebounding strongly — and the expat community must be encouraged to invest and contribute to this next chapter.
Markets are likely to respond positively, as this budget reinforces the direction toward a formal, low-interest, growth-oriented economy with improving fundamentals.
SriLankan Airlines’ debt restructuring, expected by end-December, will further support rating upgrades and strengthen investor sentiment.
Overall, this is a realistic, disciplined, and confidence-building budget — one that positions Sri Lanka to move decisively from recovery to sustainable growth. 🇱🇰📈
@anuradisanayake
@CBSL
@SEC_SriLanka
@CSE_Media