Sri Lankan President Anura Kumara Dissanayake will present his government’s 2026 budget to Parliament on Friday afternoon, with analysts seeing it as a key step in the island nation’s fragile recovery from its worst economic crisis in decades. The budget aims to balance public expectations for relief with commitments under the International Monetary Fund’s 2.9 billion dollars program, which requires higher revenue and tighter fiscal discipline.

 

Media reports suggest, the government will focus on boosting tax compliance, curbing expenditure, and improving public financial management while avoiding sharp new tax hikes.

 

 

Mr. Dissanayake’s administration faces pressure from state employees and trade unions demanding pay rises amid rising living costs. Economists describe the moment as a “Catch-22,” as the government seeks to sustain growth and social stability while maintaining IMF-mandated reforms crucial to restoring investor confidence and access to global capital markets.