Colombo, February 17, 2025 (LankaBIZ) – The Sri Lankan government presented its highly anticipated Budget 2025 in Parliament, outlining a comprehensive plan to stabilize the economy, reduce poverty, and foster sustainable development. The budget, which follows a period of economic turbulence, prioritizes fiscal discipline, social welfare, and investment-driven growth.
Economic Recovery and Fiscal Discipline
The government emphasized that Sri Lanka is emerging from the economic crisis of 2022, which had led to soaring inflation and shortages of essential goods. According to the budget speech, the economy has since stabilized, with foreign reserves increasing to USD 6.1 billion and the Sri Lankan Rupee strengthening to approximately LKR 300 per USD. The government forecasts a 5% GDP growth in 2025.
To ensure long-term financial stability, the government has successfully concluded a debt restructuring process, significantly reducing debt servicing costs. A primary budget surplus of 2.3% of GDP is targeted to meet debt repayments.
Key Budgetary Allocations and Reforms
The 2025 budget focuses on economic transformation by investing in infrastructure, digitalization, and social welfare while ensuring prudent fiscal management.
- Social Welfare and Poverty Reduction: The Aswesuma social protection program has been expanded, with increased cash grants for vulnerable communities. The government will also increase allowances for kidney patients, disabled persons, and senior citizens.
- Education and Skills Development: Over Rs. 135 billion has been allocated to improve higher education and vocational training, with plans for new scholarships and enhanced digital learning infrastructure.
- Public Transport Modernization: The budget includes Rs. 3 billion for modernizing public transport, including 100 new low-floor buses and investments in railway infrastructure to improve passenger and freight transport.
- Energy and Agriculture: The government is pushing for renewable energy projects and incentives for export-driven agriculture. A national food security strategy will ensure stable rice prices and supply chains.
- Industrial and Digital Economy Growth: Plans include expanding export markets, introducing digital payments, and modernizing business regulations to attract investors.
Good Governance and Anti-Corruption Measures
A major highlight of the budget is a renewed push for good governance and anti-corruption reforms, including stricter financial controls over public institutions. A Holding Company for State-Owned Enterprises (SOEs) will be established to improve governance, transparency, and efficiency.
Looking Ahead
The government acknowledged the challenges ahead but remained optimistic about achieving economic resilience. The budget aims to balance social welfare with fiscal responsibility, ensuring that economic benefits are distributed equitably across all sectors of society.
As Sri Lanka moves forward, all eyes will be on the implementation of these ambitious proposals and their impact on the nation’s economic recovery and long-term growth.
Sri Lanka 2025 Budget: Investor Report
