President Anura Kumara Dissanayake has announced that the Government plans to enter into new Free Trade Agreements (FTAs) and revise existing agreements to expand Sri Lanka’s international trade and investment opportunities.
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President Anura Kumara Dissanayake has announced that the Government has appointed a committee to evaluate Sri Lanka’s future engagement with the International Monetary Fund (IMF) after the current Extended Fund Facility (EFF) programme ends in March 2027.
Delivering the 2027 Budget speech in Parliament, the President said the Government remained committed to successfully completing the existing IMF programme while strengthening the country’s foreign exchange reserves.
He said the Government would consider whether a new arrangement with the IMF would be necessary after March 2027 and, if so, determine the most appropriate type of agreement for Sri Lanka. A committee has already been appointed to assess the available options.
The President also revealed that public debt is projected to fall to 87 per cent of Gross Domestic Product (GDP) by 2032, exceeding the Government’s initial target under the IMF programme.
He said the original target was to reduce public debt to 95 per cent of GDP by 2032. However, according to the IMF’s Sixth Review, the debt burden could decline further to 87 per cent by that year if current economic trends continue.
Dissanayake further said the Government was implementing reforms to expand the tax base, streamline tax exemptions and digitise tax administration.
Addressing the need for public sector reform, he said the existing state machinery must be transformed to meet the country’s future development needs.
He stressed that the expected transformation could not be achieved through traditional state structures and called for a stronger, more efficient and effective public administration.
The President also emphasised the importance of fiscal discipline and sustainable public finances, stating that the Government aimed to maintain a primary budget surplus of 2.3 per cent while keeping the overall budget deficit at 5 per cent.
He highlighted the continued implementation of the Public Financial Management Act as a key measure to strengthen fiscal accountability and improve the management of public resources.
Government expenditure is expected to reach 13.6 per cent, while public investment is projected at 4 per cent of GDP, the President said.
He added that the Government’s economic reform agenda would focus on maintaining fiscal stability, strengthening public institutions and creating the conditions necessary for sustainable economic development.
President Anura Kumara Dissanayake has assured that the Government has sufficient liquidity and financial capacity to meet Sri Lanka’s foreign debt servicing obligations over the next two years.
The Supreme Court has determined that the Protection of the State from Terrorism Bill can be passed in Parliament with a simple majority, provided that four amendments are incorporated at the Committee Stage.
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