Sri Lanka posts Rs9.5bn mid-year budget surplus on tax surge, capital spending crunch

Daily FT and EconomyNext report that Sri Lanka’s overall budget moved to a Rs. 9.5 billion surplus in the first half of 2026, compared with a Rs. 405.6 billion shortfall in the same period a year earlier. EconomyNext says increased receipts coincided with restrained capital expenditure.

EconomyNext reports that revenue and grants reached Rs. 2,956 billion, up 27.1%, while tax collections rose 25.9% to Rs. 2,710.6 billion, or 55.2% of the full-year goal. It attributes part of the tax rise to a jump in vehicle duties. EconomyNext also reports a primary balance of Rs. 1,244.1 billion, exceeding the International Monetary Fund’s Rs. 72 billion benchmark.

EconomyNext reports capital expenditure and net lending at Rs. 276.6 billion, representing 16.1% of the Rs. 1,719 billion yearly allocation. It says slow progress on post-cyclone recovery and infrastructure work reflected delays in design and tendering, and notes that development spending has repeatedly fallen short.

EconomyNext reports total government spending grew 7.9% to Rs. 2,946.5 billion, equivalent to 39% of the annual estimate. Recurring expenses increased 6.5% to Rs. 2,669.9 billion; public-sector pay rose 12% to Rs. 621.7 billion, and welfare transfers also increased. Interest costs declined 2.4% to Rs. 1,234.6 billion.

EconomyNext reports the Treasury said the positive cash position improved liquidity and offered a reserve for upcoming expenses and debt obligations. It also reports repayments were greater than fresh borrowing, leaving domestic financing net of repayments at minus Rs. 42.1 billion.

Written automatically by AI from the outlets’ own reports, and not reviewed by an editor. It can be wrong — the original report is the authority.