Sri Lanka records major budget surplus in first quarter

A sharp rise in revenue pushed the state budget into a significant surplus during the first quarter of 2026. Latest data from the Central Bank of Sri Lanka show a primary surplus of 709.6 billion rupees for the January to March period, marking a 78.5% surge compared to the same timeframe last year. This fiscal consolidation reflects a major turnaround, steering the overall budget balance into a surplus of 116.35 billion rupees against the heavy deficit recorded a year earlier.

Total revenue and grants climbed by 40.5% to reach 1.5 trillion rupees. This performance received strong support from a 36% increase in tax collections alongside a 91% leap in non-tax revenue.

Meanwhile, overall government expenditure experienced a more modest growth of 6.2%, amounting to 1.38 trillion rupees. Whilst recurrent spending rose moderately, development-focused capital expenditure expanded by over 29% to reach 106 billion rupees.