Project delays choke growth as half of funds spent late in year: ADB

Sri Lanka’s public investment drive continues to be hampered by delays, with project execution heavily back-loaded and an average 50.3% of disbursements taking place in the fourth quarter during 2019–2024, according to insights shared at the ‘Asian Development Outlook – April 2026’ event held in Colombo yesterday.

The trend reflects persistent bottlenecks in procurement, land acquisition, feasibility assessments, and inter-agency coordination.

“Line ministries often lack the technical capacity to prepare bankable projects, while weak monitoring systems limit the timely identification of bottlenecks,” officials noted.

Citing International Monetary Fund research, the discussion highlighted that a one percentage point increase in public investment can raise output by 1.5% over four years, with stronger effects in capital-scarce economies.

However, continued under-investment is constraining Sri Lanka’s growth potential, slowing the modernisation of transport, energy, and water infrastructure, and limiting the country’s ability to adapt to climate-related risks.

The urgency of strengthening infrastructure was further underscored by initial assessments of damage from Cyclone Ditwah, estimated at around USD 2 billion.

Experts also warned that under-execution weakens the effectiveness of countercyclical fiscal policy, reducing the Government’s ability to respond to economic shocks.

Picture: Nirukthi Kariyawasam, Economics Analyst - Sri Lankan Resident Mission (SLRM) of ADB, Lakshini Fernando, Principal Economics Officer - SLRM, ADB, Liliya Aleksanyan, Senior Country Economist, SLRM of ADB and Dinuk de Silva, Senior Economics Assistant, SLRM of ADB)