Sri Lanka’s spending overshoots income by Rs. 498bn in 1Q25

Sri Lanka recorded a steep budget deficit of Rs. 498.28 billion in the first quarter of 2025 (1Q25), official data showed.

According to the latest Financial Performance Statement submitted to the Cabinet of Ministers this week, the gap between revenue and expenditure widened significantly in the three months ending March 31, with total income at Rs. 1,064.66 billion and expenditure at Rs. 1,562.94 billion.

The disclosure, a statutory obligation under Section 53 (1) of the Public Finance Management Act, No. 44 of 2024, outlined cumulative figures encompassing all Ministries, Departments, District Secretariats, and Special Expenditure Units.

Tax revenue made up the bulk of government income at Rs. 970.58 billion, followed by non-tax revenue at Rs. 87.26 billion, capital revenue at Rs. 5.77 billion, and grants at Rs. 1.05 billion. On the expenditure side, recurrent costs dominated at Rs. 1,226.55 billion, while capital spending, including government loan repayments, stood at Rs. 336.39 billion.

The statement was presented within the legally mandated 45-day window following the close of the quarter and is expected to inform ongoing policy discussions around public finance discipline and fiscal consolidation.