📈 Sri Lanka's Budget Deficit Down 57% YTD Oct., Primary Surplus Surges

Sri Lanka's fiscal performance continued to strengthen through October 2025, with significant improvements in the budget deficit and primary surplus. • Budget Deficit: Down 57% YoY to Rs. 455.8 Bn (from Rs. 1.06 Tn) for Jan-Oct 2025. • Primary Surplus: Increased by 96% YoY to Rs. 1.63 Tn (from Rs. 830.7 Bn). • Total Revenue: Rose 33% YoY to Rs. 4.3 Tn. • Tax revenue: Up 34% YoY to Rs. 4.03 Tn. • Non-tax revenue: Up 19% YoY to Rs. 303 Bn. • Total Expenditure: • Recurrent expenditure: Up 11% YoY to Rs. 4.22 Tn. • Capital and net lending: Increased 9% YoY to Rs. 582 Bn. Post-Ditwah Recovery Efforts: • The government plans supplementary estimates: Rs. 50 Bn for 2025 and Rs. 500 Bn for 2026 for relief and recovery. • IMF is reviewing a request for ~US$ 200 Mn via a Rapid Financing Instrument for Ditwah relief. The fifth review of the Extended Fund Facility (EFF) has been postponed to early 2026. Experts warn against accumulating "larger than necessary" surpluses at the expense of investment, emphasizing the need for accelerating reforms and attracting foreign and domestic private capital for sustainable growth.