President Anura Kumara Dissanayake today (12) presented the 2027 Budget in Parliament, projecting the country's budget deficit at Rs. 1.753 trillion, equivalent to 4.5 per cent of Gross Domestic Product (GDP).
The Budget, the third presented by the National People's Power (NPP)-led Government and the 81st in Sri Lanka's history, estimates total government expenditure at Rs. 7.933 trillion, compared to Rs. 7.309 trillion in the 2026 revised estimates.
Delivering the Budget speech in his capacity as Minister of Finance, Planning and Economic Development, President Dissanayake said the Government was committed to transforming the long-standing aspirations of generations into reality by building a prosperous nation.
He identified poverty eradication, establishing a just society, eliminating bribery and corruption, accelerating economic development, restoring public trust and ensuring a decent standard of living for all citizens as key priorities.
The 2027 Budget signals a shift in the Government's economic policy focus from economic stabilisation towards expansion and transformative development, with Rs. 2 trillion allocated for public investment.
According to the Budget estimates, total government revenue and grants are projected at Rs. 6.18 trillion, while total revenue is estimated at Rs. 6.15 trillion.
Tax revenue is expected to generate Rs. 5.667 trillion, comprising Rs. 1.341 trillion from income taxes, Rs. 3.592 trillion from taxes on goods and services and Rs. 754 billion from taxes on external trade.
Non-tax revenue is estimated at Rs. 463 billion, while grants are projected at Rs. 30 billion.
Meanwhile, recurrent expenditure is expected to reach Rs. 5.944 trillion, with Rs. 1.41 trillion allocated for salaries and wages, Rs. 2.643 trillion for interest payments and Rs. 1.482 trillion for subsidies and transfers.
The projected budget deficit of Rs. 1.753 trillion marks an increase from the Rs. 1.328 trillion deficit recorded in the 2026 revised estimates, which represented 3.7 per cent of GDP.
Despite the higher overall deficit, the Government expects to maintain a primary surplus of Rs. 890 billion, equivalent to approximately 2.3 per cent of GDP. The revenue surplus is projected at Rs. 206 billion.
To finance the budget deficit, the Government plans to raise Rs. 1.643 trillion through domestic financing and Rs. 110 billion through foreign financing.
Public investment is expected to increase to 5.1 per cent of GDP in 2027, compared to 4.1 per cent in the 2026 revised estimates.
The capital investment programme will focus on infrastructure development, including roads, railways, transport networks and logistics, alongside investments in broader economic and social development.
The Budget is being presented amid the Government's ongoing economic reform programme and its commitments under the International Monetary Fund's (IMF) Extended Fund Facility (EFF).
The IMF's seventh programme review reached a staff-level agreement in November, with the Budget and continued progress on debt restructuring forming part of the programme's requirements.
Meanwhile, the Budget debate is scheduled to continue until December 14.
The Second Reading debate will take place from November 13 to 20, with the vote scheduled for 6.00 p.m. on November 20.
The Committee Stage debate will be held from November 21 to December 14, while the final vote on the Third Reading is scheduled for December 14.
The 2027 Budget sets out the Government's fiscal priorities for the coming year, with a focus on increasing public investment, expanding economic activity, strengthening revenue collection and maintaining debt sustainability.
