Seminar on Impact of Budget on the National Economy at the OPA

The 2026 National Budget focuses on growth while advancing development and debt sustainability. This was highlighted at a seminar on 'Impact of the Budget on the National Economy - Way Forward' organized by the Organisation of Professional Associations of Sri Lanka. The Keynote Speaker was Dr. Harshana Suriyapperuma, Secretary to the Treasury and Secretary to the Ministry of Finance, Planning and Economic Development while the panel of expert guest speakers consisted of Mr. J. P. R. Karunaratne, former Deputy Governor of the Central Bank of Sri Lanka; Ms. S. Iyesha Asanthi, Commissioner of Tax Policy and Legislation at the Department of Inland Revenue; and Dr. Nishan De Mel, Director of Verite Research.

In his keynote address, Dr. Harshana Suriyapperuma observed that Sri Lanka was successfully navigating a challenging period due to the collective efforts of all stakeholders, particularly its citizens and the business community. He stressed that the central objective of the 2026 Budget was to drive growth by focusing on short- and medium-term policies while framing the foundation for future growth. The Budget, he noted, promotes several key strategies, including expert diversification, inclusive growth, debt sustainability, strengthening the production economy, eradicating rural poverty and promoting digitization. Furthermore, it aims to strengthen the confidence built by the government by ensuring greater consistency in taxation and debt sustainability, enhancing stakeholder consultation, and improving the business environment through trade agreements.

Dr. Suriyapperuma also addressed the widespread misconception that debt repayment would commence only in 2028, clarifying that repayments are already being made on schedule. Since the increase in repayment obligations in 2028 will be marginal, he expressed confidence in Sri Lanka's ability to meet its commitments provided the country maintains its trajectory of higher fiscal revenue and disciplined expenditure. He stressed the need for zero tolerance for corruption, comprehensive digitisation, greater transparency and accountability, and focused development of the education, transport and SME sectors.

Dr. Nishan de Mel noted that the country's fiscal indicators were very positive, with controlled expenditure, stable revenue growth, budget deficit reduction and impressive primary balance. However, he warned that real indicators were troubling, as employment is at a 20-year low, real incomes remain below 2018 levels, and poverty has doubled since 2019. He also pointed to weaknesses in monetary policy, including missed inflation targets for six consecutive quarters, the highest real interest rates in decades, and the world's highest interest-cost-to-revenue ratio. The buildup of foreign reserves has also stalled. As a result, he argued that monetary shortcomings were eroding fiscal gains.

In assessing the Budget, Dr. de Mel highlighted several positives: revenue exceeded targets in 2024 and 2025, with VAT contributing a 2.8% increase this year, and health spending surpassed defence allocations in 2025 for the first time in decades. He also noted the Budget's focus on social welfare and infrastructure. However, he raised concerns that over the lack of cost estimates for several proposals, unexplained increases in major allocations, inconsistencies in data, and decrease in publicly available information on GDP, poverty and other indicators.

The presentations were followed by a Q & A session, moderated by Vice President, Mr Bhanu Wijayaratne. Ms. S. Iyesha Asanthi stated that several measures had been introduced to broaden the tax net, including the reduction of the tax threshold, introduction of e-invoicing system as well as a modern tax audit scheme. Mr. J. P. R. Karunaratne observed that the government was currently on a clear path towards debt repayment under the IMF programme. He expressed confidence in Sri Lanka's ability to meet foreign debt repayments following the buildup of foreign reserves. However, he cautioned against taking on additional foreign debt, especially for unproductive purposes, and stressed the need to boost exports in order to cushion against external vulnerabilities.

The seminar was attended by OPA President Mr. Jayantha Gallehewa, President-Elect Mr. Tisara de Silva, General Secretary Mr. Ravi Rupasinghe, Treasurer Mr. Dharshana Wijemanne, along with other officer bearers and delegates from OPA's professional membership.