Sri Lanka Starts Strongly in 2025: with Revenue Up, Budget Deficit Down

The Government kicked off 2025 on a positive financial note, showing improved fiscal health. In January alone, revenue and grants surged by 22% year-on-year to Rs. 346.6 billion, while the overall Budget deficit narrowed significantly to Rs. 119.4 billion from Rs. 166.9 billion in January 2024.

Although total expenditure and net lending rose to Rs. 466 billion from Rs. 450.1 billion, the impact was cushioned by strong revenue growth. Net domestic financing also declined, falling to Rs. 130.3 billion from Rs. 177.3 billion, reflecting better fiscal discipline. Meanwhile, foreign financing marked a net repayment of Rs. 10.9 billion, slightly higher than last year’s Rs. 10.5 billion.

Looking back at 2024, government revenue jumped by Rs. 1 trillion (33%) to Rs. 4 trillion, outpacing the Rs. 774 billion (14%) rise in expenditure. A similar revenue growth pattern was seen in 2023, signaling consistent fiscal recovery.

 

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