📈 Budget 2027: Call to Avoid Fiscal Loosening Amid Global Uncertainty

As Sri Lanka prepares for Budget 2027, economic analysts and policymakers emphasize holding the fiscal line rather than issuing a stimulus budget, particularly given global market uncertainties, tariff disputes, and volatile capital flows. • Key Fiscal Expectations: • Avoid fiscal loosening, unrestrained spending, or widespread concessions that risk widening the deficit. • Maintain structural reforms backed by the IMF to ensure the release of upcoming funding tranches. • Any potential concessions should strictly focus on structural corrections, such as raising the PAYE tax threshold for wage earners, rather than broad giveaways. • Policy & Sector Impact: • Cross-party support within the Committee on Public Finance reinforces the focus on critical economic reforms in trade, labor, and the investment environment. • Key commercial sectors, including manufacturing, exports, and domestic firms, are urged to enhance competitiveness without relying on state intervention or government bailouts. • Long-term stability relies on protecting the revenue base against reviving subsidies or absorbing losses from state-owned enterprises (SOEs).