The second day of the Second Reading debate on the 2027 Budget is scheduled to take place in Parliament today (14), with proceedings starting at 9.30 a.m.
President Anura Kumara Dissanayake, in his capacity as Minister of Finance, presented the Second Reading of the Appropriation Bill for 2027 on Thursday (12). The Government has projected a budget deficit of Rs. 1.753 trillion, or 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 expenditure at Rs. 7.933 trillion, compared to Rs. 7.309 trillion in the 2026 revised estimates.
In his Budget Speech, the President spoke of turning long-standing national aspirations into reality by building a prosperous nation. He named poverty eradication, a just society, the elimination of bribery and corruption, accelerated economic development, restoring public trust and a decent standard of living for all as key priorities. The Budget marks a shift in policy focus from stabilisation towards expansion and transformative development, with Rs. 2 trillion allocated for public investment.
Total revenue and grants are projected at Rs. 6.18 trillion, with total revenue estimated at Rs. 6.15 trillion. Tax revenue is expected to generate Rs. 5.667 trillion, including 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 and grants at Rs. 30 billion. Recurrent expenditure is projected at Rs. 5.944 trillion, comprising Rs. 1.41 trillion for salaries and wages, Rs. 2.643 trillion for interest payments and Rs. 1.482 trillion for subsidies and transfers.
The projected deficit is higher than the Rs. 1.328 trillion, or 3.7 per cent of GDP, in the 2026 revised estimates. Even so, the Government expects a primary surplus of Rs. 890 billion, about 2.3 per cent of GDP, and a revenue surplus of Rs. 206 billion. The deficit is to be financed through Rs. 1.643 trillion in domestic financing and Rs. 110 billion in foreign financing.
Public investment is set to rise to 5.1 per cent of GDP in 2027 from 4.1 per cent in the 2026 revised estimates, with the capital programme focusing on infrastructure such as roads, railways, transport networks and logistics, alongside wider economic and social development initiatives.
The Budget comes amid the Government’s ongoing 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 requirements.
The Second Reading debate will continue until November 20, with the vote at 6.00 p.m. that day. The Committee Stage debate will run from November 21 to December 14, with the Third Reading vote scheduled for December 14.
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