📈 Govt. posts Rs. 116.35 b Budget surplus in 1Q as revenue surges 40%

Sri Lanka’s fiscal position strengthened significantly in Q1 2026, recording an overall budget turnaround driven by robust revenue collection and ongoing fiscal consolidation, according to Central Bank data. • Overall Fiscal Performance: The overall Budget balance recorded a surplus of Rs. 116.35 Bn, a sharp turnaround from the Rs. 234.46 Bn deficit in Q1 2025. The primary surplus expanded by 78.5% YoY to Rs. 709.6 Bn (up from Rs. 397.47 Bn). • Revenue Breakdown: Total revenue and grants jumped 40.5% YoY to Rs. 1.5 Trillion. • Tax revenue rose 36.4% YoY to Rs. 1.34 Trillion. • Non-tax revenue surged 91.2% YoY to Rs. 153.88 Bn. • Grants remained marginal at Rs. 0.47 Bn. • Expenditure Trends: Total expenditure and lending minus repayments grew at a slower pace of 6.2% YoY, totaling Rs. 1.38 Trillion. • Recurrent expenditure increased by 4.7% YoY to Rs. 1.28 Trillion. • Capital expenditure and lending minus repayments rose 29.2% YoY to Rs. 106 Bn. The surge in state revenue comfortably outpaced total spending, allowing the government to maintain a strong quarterly surplus.