Sri Lanka Economic and Public Debt Analysis
The severe economic downturn, weak Sri Lanka's revenues, rising health expenditure and energy
needs led to a worsening of the fiscal situation
While the decline in growth partly led to shrinking revenues, Sri Lanka had to increase spending to safeguard its population from a
double pronged health and energy crisis
Primary balance, revenues¹ and expenditures
In LKRbn (Revenue and Expenditures, on left-hand axis) and in % of GDP (Primary balance)
1500
0.6%
(500)
(2500)
(4500)
2018A
(3.4%)
(4.0%)²
(4.3%)
(5.7%)
Over 2020 and 2021, Sri Lanka faced
increasing expenditure needs, resulting from
the need to finance its vaccination program,
provide assistance to low-income citizens
impacted by lockdowns and the general
provision of healthcare facilities and medical
equipment
In 2022, the rise in global energy prices has
derailed the country's expected recovery and
further deteriorated public finances, as the
Government had to intervene to protect its
citizens from sky-high energy and food prices
2019A
Revenue and Grants (LKRbn)
2020A
2021A
Expenditures (LKRbn)
2022P
Primary balance (%GDP)
▸ Sri Lanka's primary deficit widened in 2020 on the back of the unprecedented COVID shock and the necessary
rise in public health spending. Primary balance is expected to remain in negative territory this year as the
Government is obliged to assist its population confront the scarcity of energy resources and food supplies
Sources: Central Bank of Sri Lanka, IMF
Notes: (1) Including grants, (2) 2022 expected primary balance figure is already reflective of policies committed (or already implemented) as part of the
IMF-supported programView entire presentation