Government Revenue Rises 18% amidst High Spending in Early 2025
- CNL Reporter
- May 5, 2025
- Banking and Financial, News
- BoC
- 0 Comments
Sri Lanka’s state revenue rose 18% to Rs. 760.7 billion in the first two months of 2025, driven by increased tax collection and the resumption of vehicle imports in February, official data shows.
However, current expenditure closely followed, growing 15% to Rs. 791.3 billion, fueled by state salary hikes and the hiring of 30,000 unemployed graduates.
Despite improved revenues, capital spending dropped 34% to Rs. 56.2 billion. The overall budget deficit narrowed to Rs. 86.6 billion from Rs. 129.5 billion last year, reducing domestic borrowing. Foreign debt repayments also exceeded new borrowing, marking a rare net outflow of Rs. 10.2 billion.
Critics warn that past monetary policy missteps—such as excessive money printing and suppressed interest rates—have led to cascading fiscal issues, currency depreciation, and eventual debt default. Analysts stress the need for prudent monetary and fiscal coordination to avoid repeating past errors and maintain external stability.
