BudgetCheck 2025 by FactCheck.lk

The team at FactCheck.lk (a platform run by Verité Research) fact-checked six statements from President Anura Kumara Dissanayake’s maiden budget speech for 2025. Of these, four statements were graded as True and two of them as Partly True.   

Statement 1: “The country’s poverty rate reached 25.9 per cent in 2023 according to World Bank (WB) estimates”. 

Fact-check: The president’s claim that Sri Lanka’s poverty rate was 25.9% in 2023 aligns with an estimate published by the World Bank (WB). However, this estimate is based on a different poverty line than the one used by Sri Lanka’s Department of Census and Statistics (DCS) for official poverty measurements.   
The WB uses a poverty line of USD 3.65 per day, adjusted for 2017 purchasing power parity. In contrast, the DCS uses a poverty line based on the cost of purchasing a specific minimum basket of goods in Sri Lanka. The impact of this difference is evident in 2019, when both institutions published poverty estimates using their respective measures—WB reported a poverty rate of 11.3%, while the DCS estimated it at 14.3%. Since then, the DCS has updated its poverty line but has not released an official poverty estimate.   
Sri Lanka’s official poverty rate is substantially higher than what is estimated by the WB, because the official poverty line is lower than what is used by the WB. If the increase in poverty projected by the WB from 2019 onward were applied to Sri Lanka’s official poverty rate, it would exceed 30%. This is further supported by an independent survey conducted by LIRNEasia in 2023, which used the DCS’s updated poverty line and similarly found that poverty exceeded 30%.   
Verdict: PARTLY TRUE   

Statement 2: “The Western Province contributed 44 per cent of the GDP in 2023”.

Fact-check: 2023 Provincial Gross Domestic Product (latest available) data by CBSL confirms that the Western Province accounts for 43.9% of Sri Lanka’s national GDP.   
Verdict: TRUE   

Statement 3: “We were able to maintain foreign exchange reserves at a level of $6.1 billion at the end of 2024 […]”

Fact-check: The president correctly cites flawed reporting by the CBSL, which states that the country’s foreign exchange reserves stood at USD 6.1 billion as of the end of December 2024. This is because this figure includes a USD 1.4 billion swap arrangement with the People’s Bank of China (PBOC).   
According to international standards of defining a reserve asset, it must be under the direct and effective control of the monetary authority and readily available without condition. The PBOC swap, by these standards, does not qualify as a reserve asset due to not fulfilling several of these conditions.   
Despite this, the CBSL began incorrectly including the PBOC swap as part of its reserve assets in December 2021 (it didn’t prior to that), and has not yet rectified that reporting anomaly. Correcting for that, Sri Lanka’s actual reserves at the end of December 2024 amount to USD 4.7 billion.   
For more information on why the PBOC swap is not considered reserves and details on the CBSL’s misreporting since 2021, read our previous fact-check: CBSL Assistant Governor correctly cites flawed reserve reporting - FactCheck   
Verdict: PARTLY TRUE   

Statement 4: “Sri Lanka had one of the world’s lowest Government tax revenue levels of 7.3 per cent of GDP in 2022.”

Fact-check: CBSL data confirms that tax revenue as a percentage of GDP was 7.3% in 2022, with Sri Lanka ranking as the 6th lowest among 196 countries for that year, according to World Bank data.   
Verdict: TRUE   

Statement 5: “The Public Financial Management Act sets the key fiscal rule, which is a limit of primary expenditure of 13% of GDP. This year’s budget is prepared in accordance with this requirement.”

Fact-check: The Financial Management Act, No. 44 of 2024 sets several fiscal limits, including a cap on primary expenditure. Section 15(1) of the Act stipulates that the government’s primary expenditure must not exceed 13% of the estimated nominal GDP for the relevant financial year. For the 2025 Budget, primary expenditure is set at 12.9% of GDP.   
Verdict: TRUE   

Statement 6: “[…] price levels of many goods and services remain elevated, and income growth has not kept pace accordingly […] the fact that real wages have dropped significantly over the last couple of years it is necessary to offer a fair pay hike.”

Fact-check: CBSL data shows that between 2018 and 2024, prices increased by 102.0%, while (informal) private sector wages* grew by only 84.5% and public sector wages** grew by 61.0%. As a result, during this period, real wages in the (informal) private sector declined by 8.7%, while real wages in the public sector dropped by 20.3%.   
*This is based on the Informal Private Sector Employees’ Wage Rate Index reported by CBSL
** This is based on the Public Sector Employees’ Wage Rate Index reported by CBSL
Verdict: TRUE   
FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.
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