Government Revenue, Spending & Debt
A visual overview of Sri Lanka’s fiscal position, covering government revenue, expenditure, the budget balance, tax composition, public debt and Treasury securities using the latest available annual fiscal data and Treasury auction data.
Sri Lanka’s fiscal position improved substantially in 2025. Revenue and grants increased to approximately Rs. 5.49 trillion, while total expenditure was approximately Rs. 6.23 trillion. This produced an overall budget deficit of approximately Rs. 745 billion, significantly below the deficits recorded in 2020–2024. Importantly, the government recorded a primary surplus of approximately Rs. 1.76 trillion in 2025, indicating a marked improvement in the underlying fiscal balance.
Tax revenue increased sharply in 2025 to approximately Rs. 5.05 trillion. Indirect taxes remained dominant at around 77.4% of total tax revenue, while direct taxes accounted for approximately 22.6%. The increase in total revenue represents a major strengthening from the low-revenue period following the economic crisis, although the tax system remains heavily reliant on indirect taxation.
Interest payments remained the largest component of recurrent government expenditure in 2025 at approximately Rs. 1.23 trillion. Salaries and wages accounted for approximately Rs. 1.16 trillion, while goods and services represented approximately Rs. 2.50 trillion. Capital and net lending amounted to approximately Rs. 998 billion. The continued weight of interest costs illustrates the fiscal burden created by the accumulated public debt stock.
Central government debt stood at approximately Rs. 29.99 trillion at end-2025. Domestic debt accounted for approximately Rs. 18.68 trillion, while foreign debt was approximately Rs. 11.32 trillion. Total debt declined slightly as a share of GDP, from 95.5% in 2024 to 91.6% in 2025. The improvement reflects stronger fiscal performance and the impact of external debt restructuring, although the absolute debt stock remains very high.
Treasury bill yields remained relatively stable during the latter part of 2025. By November, weighted average yields were approximately 7.52% for 91-day bills, 7.91% for 182-day bills and 8.03% for 364-day bills. The relatively narrow yield spread across maturities indicates a substantially lower interest-rate environment compared with the exceptionally high rates seen during the fiscal and monetary stress period.