Sri Lanka targets growth beyond crisis recovery in budget, on course for IMF exit

Sri Lankan President Anura Kumara Dissanayake presented a budget on Thursday that shifts the government’s focus toward expansion, saying it expects to finish its IMF programme in March and can meet upcoming debt payments. Business Recorder reported that the plan also aims to control inflation, support growth and prepare for renewed access to international bond markets. Economic growth is forecast at 4.4% this year, while foreign reserves have recovered to $6.9 billion.

The government projects its debt-to-GDP ratio at 92.9% in 2026, compared with 114.2% in 2022, and says it can repay $2.9 billion in 2027 and $3.5 billion in 2028. Its fiscal plan seeks a 2.6% surplus in 2027, above the IMF’s 2.3% programme benchmark, while fuel purchases reached $4.4 billion in the first nine months of this year. Proposed measures include expanding the sole refinery, increasing fuel storage and constructing pipelines; investors will assess whether growth initiatives remain consistent with fiscal discipline.