Sri Lanka’s President Anura Kumara Dissanayake, who is also the nation’s finance minister, is expected to present the state budget for 2025 on Monday, 17 February 2025.

A key focus of the budget is to ease the vehicle import duties, which is expected to significantly contribute to increasing the revenue-to-GDP ratio. The budget is also expected to lower income taxes and increase welfare spending, which will offer relief after the 2022 economic crisis.

Dissanayake is also expected to announce various policies, such as expanding the scope of excise duties and reducing unnecessary public spending to boost revenue and strengthen Sri Lanka’s USD 85 billion economy.

The budget seeks to secure approval from the International Monetary Fund (IMF) as the country wants to keep a USD 3 billion IMF bailout on track.

The IMF projects Sri Lanka’s budget to reach a primary surplus of 2.3% of GDP by 2025, up from last year’s 1% target. If the government implements the proposed policies, it can secure more funding and speed up debt reduction.

Investors are monitoring the budget speech for details on fiscal consolidation, including cuts to public spending, asset privatisation, and investment-friendly policies.

“The budget will set the economic roadmap for Sri Lanka in the coming years,” said Saurav Anand, an economist at Standard Chartered Plc. in Mumbai, India. “Foreign investors are likely to continue looking favourably at Sri Lanka if the authorities adhere to the IMF targets on fiscal consolidation and revenue generation while pushing for an increase in capital spending.”