🚨 Sri Lanka Must Earn US$ 50 Bn Forex Annually: Analyst Criticizes Budget 2026 for Lack of Laser-Sharp Strategy 📈

• Forex & Growth: The key challenge for Sri Lanka to achieve 6%+ GDP growth is hitting US$ 50 Bn in annual foreign exchange earnings, a target lacking a clear strategy in Budget 2026. • Reserves Reality: While gross reserves stand at US$ 6.2 Bn, Net Foreign Reserves (NFR) are negative as per IMF stipulations (after removing currency swaps). • Fiscal & Implementation: Revenue/GDP reached 15.9%, beating the IMF target of 15.3%. However, capital expenditure utilization for 2025 is critically low, estimated at only 40-45% (approx. Rs. 600 Bn utilized out of a Rs. 1.4 Tn budget). • Proposed 3-Point Forex Drive: 1. Exports: Must increase revenue from US$ 19 Bn to US$ 30 Bn. Key initiative: Signing the Comprehensive Economic Partnership Agreement (CEPA) with India, benefiting sectors like apparel & textiles. 2. Tourism: Current 2025 earnings are US$ 2.6 Bn, which is -33% compared to 2018 ($3.5 Bn). Focus must shift to attracting a higher-value traveler ($200 per traveler). 3. Remittances: Target to reach US$ 10 Bn via quality, white-collar service exports. • Consumer Distress: Only 37% of Sri Lankan families cover monthly expenses with their income. Unredeemed jewelry (pawning) jumped from Rs. 210 Bn (2019) to Rs. 571 Bn (2024), highlighting severe household financial fragility. • Governance Highlight: The strong anti-narcotics drive in 2025 (e.g., 1,736 Kg Heroin, 3,784 Kg Ice seized; 21,985 arrests to date) is commended as a significant governance win.