President Anura Kumara Dissanayake, addressing the commencement of the Kadawatha–Mirigama section of the Central Expressway construction today (17), highlighted Sri Lanka’s recovery path by presenting several critical economic achievements and targets.
- Budget Deficit lower than projections
For the first time in history, Sri Lanka is recording a budget deficit below the figure projected in the national budget, ending the long-standing practice of repeated supplementary allocations during the year.
- Sustained Economic Growth
The President stated that Sri Lanka is now approaching two consecutive years of nearly 5% economic growth, a remarkable turnaround following the 2022–2023 crisis.
- Rising Foreign Reserves
He announced the government’s target of raising foreign reserves to US$ 7 billion by the end of 2025, strengthening financial stability and the rupee’s resilience.
- Single-Digit Interest Rates
Bank interest rates have been brought down to single digits, stimulating lending for private investment and accelerating business activity.
- US$ 1 Billion in Direct Investments
Sri Lanka has successfully attracted US$ 1 billion in direct investment during the government’s first year in office, with several large-scale projects underway in the Colombo Port City and beyond.
- Major Port City Projects
Four projects worth US$ 1.4 billion in the Colombo Port City have already been approved, while another US$ 1.2 billion project is nearing completion of its approval process, expected to be finalized during the upcoming visit to Japan.
- Salary Reforms in Public Service
The President revealed sweeping reforms to modernize the public service, with Rs. 110 billion allocated for salary increases in 2026 and Rs. 330 billion earmarked for 2027, the largest portion of the national budget dedicated to state sector salaries.
President Dissanayake said these achievements marked 2025 as a “historic turning point” in Sri Lanka’s economic, social, and political life, assuring that the government is determined to halve the typical “lost decade” that follows an economic collapse.
Full statement of President Anura Kumara Dissanayake:
Particularly, we know that a few years ago our country faced a severe economic crisis. As a result, both the entire economy and people’s livelihoods collapsed. Following such an economic collapse, a country generally loses a decade. Our government, however, is determined to change this within less than a decade, perhaps even in half that time. The 2025 Budget has been prepared with the specific objective of bringing this crisis to an end.
This ‘lost decade’ generates long-term challenges and this section of the expressway can be seen as a symbol of that. The scale and direction of the crisis caused by the economic collapse can be understood through projects of this nature. During my state visit to China in January, I requested President Xi Jinping’s support to restart the projects in Sri Lanka that had been suspended under Chinese assistance. He paid special attention to this matter and agreed to provide the necessary support to recommence all such projects, for which we are deeply grateful.
We also requested a special concessional loan scheme for this expressway section. We were informed that while such a scheme was not available in US dollars, it could be provided in yuan. Accordingly, the Export-Import Bank of China expressed its willingness to extend the loan at an interest rate of between 2.5% and 3.5%. We extend our sincere gratitude for this support.
As a nation, we must have a serious discussion on how to revive our economy. When we talk about revitalising the economy, we must also examine how this crisis emerged. The social tragedy brought about by the 2022–2023 economic crisis did not occur spontaneously. There were numerous factors and causes linked to it. Our generation witnessed the collapse of the economy. We saw people dying in queues and we experienced the breakdown of the social fabric. We became heirs to that tragedy. Today, I assure the people that we are committed to rebuilding Sri Lanka in such a way that such a crisis will never recur.
For that, infrastructure development alone is not sufficient. In the past, economic development efforts were focused solely on infrastructure. But infrastructure is only one component of establishing a stable economy and society. If that component stands alone, it becomes distorted. This is why our country has pursued a distorted development strategy.
Economic and social stability cannot be built merely through construction. A number of other dimensions must also be fulfilled. Therefore, our government is working to create economic stability through multiple approaches. Infrastructure is one part of this, but there are many other equally important elements.
The rule of law must be firmly established. We are reaffirming the principle that all citizens are equal before the law. A stable state can only be built when everyone submits to the authority of the law.
The decline of our political culture has allowed armed criminal gangs to flourish, turning our nation into a victim of their influence. These groups created a shadow state, supported by political power and protected by elements within law enforcement. We are determined to dismantle this underworld once and for all. Without doing so, it will be impossible to secure economic stability or ensure a safe future for our children. Those currently under arrest have been responsible for nearly 50% of the drug trafficking in the country and maintain links with almost 75% of the armed criminal gangs. They have also funnelled illicit funds into political authorities through various channels. We are now taking decisive action to eradicate these criminal networks and restore the rule of law.
Widespread bribery, corruption and fraud within the political establishment have long stood as major obstacles to development, creating instability across society. Today, however, we have established a political culture that neither steals nor wastes a single cent of the people’s money.
We have also identified certain individuals and areas within the state apparatus that remain tied to out-dated and corrupt practices. We have made it clear that such individuals have the opportunity to adapt to this new political culture. If they cannot, they are free to leave or we will remove them. What our nation needs is a public service that respects every rupee of the people’s money and safeguards it as responsibly as corporate property. To achieve this, we are providing better facilities for public servants, including significant salary increases. In fact, the largest portion of our budget is allocated to these salary adjustments. A total of Rs. 110 billion has been set aside for the enhanced salaries in 2026 alone, while by 2027 we will invest Rs. 330 billion solely for this purpose. Through these measures, we are fully committed to modernizing the public service and ensuring it becomes a professional, accountable and efficient pillar of our nation.
Today, we have made significant progress across every sector. For the first time in Sri Lanka’s history, this year we are recording a budget deficit that is lower than the figure initially projected in the national budget. Traditionally, Sri Lanka has never met its revenue targets, and successive governments resorted to repeated supplementary allocations throughout the year. We have put an end to that practice. Instead, we are systematically working towards clear economic targets. As a result, Sri Lanka is now approaching two consecutive years of maintaining an economic growth rate of nearly 5%.
Today, we have achieved significant stability in the value of the dollar. Our goal is to increase foreign reserves to US $ 7 billion by the end of this year. We have successfully brought bank interest rates down to single digits, creating a more favourable environment for growth. As a result, the banking system is now channelling substantial funds into private investment, giving fresh momentum to economic activity.
We have also succeeded in attracting US$ 01 billion in direct investment during the government’s first year. In the Port City alone, four projects valued at US$ 1.4 billion have already been approved, while another major project worth US$ 1.2 billion is 90% complete in its approval process, which we expect to finalize during the upcoming visit to Japan. Furthermore, this year is set to record the highest growth in the tourism sector, export earnings and foreign remittances.
In this way, a previously collapsed state is being rebuilt into an economy with a stable foundation. This year marks a historic turning point in Sri Lanka, where the economy, social life, political culture and the rule of law have all undergone significant transformation. The road network plays a critical role in national development. The economic collapse was, in part, caused by corruption that left key portions of the expressway incomplete. We are now rectifying this and ensuring completion. Similarly, we are committed to providing the public with safe drinking water, efficient public services and reliable electricity through targeted projects. We are advancing steadily on this journey. Political unrest and distractions elsewhere do not deter us. Rather than maintaining a degraded political culture, we are creating a modern, developed political culture. For sustainable development, the progress of both political authorities and citizens is essential. Consequently, we have undertaken the challenge of transforming Sri Lanka into a developed nation, positioning it among the most advanced countries in the world.
I would like to express my sincere gratitude to everyone who has dedicated themselves to ensuring the success of this project. As the government, we will provide every possible support and I urge all involved to continue their efforts with determination, completing this project efficiently and delivering it to the nation without a single day of delay.
The event was attended by Minister of Transport, Highways, Ports and Civil Aviation Bimal Ratnayake, Deputy Minister of Transport and Highways Prasanna Gunasena, Deputy Minister of Ports and Civil Aviation Janitha Ruwan Kodithuwakku, Members of Parliament, Chinese Ambassador to Sri Lanka Qi Zhenhong and other representatives of the Chinese government as well as officials from the Ministry of Finance, the Ministry of Transport, Highways, Ports and Civil Aviation, the Road Development Authority and a number of other distinguished participants. (Newswire)
