A general view shows Sri Lanka’s capital Colombo. (AFP)
Colombo: Sri Lanka is set to expand its free trade agreement network and simplify its import duty structure to help small- and medium-sized enterprises access raw materials more easily, President Anura Kumara Dissanayake announced on Monday while presenting the 2025 budget.
This is the first budget of the National People’s Power (NPP) government which was elected to power in 2024.
The president said they expect economic growth of over 5 percent real GDP growth over the medium term.
The government expects exports of goods and services to reach an all-time high of about $19bn in 2025 and the growth in non-debt creating inflows along with robust economic growth and a primary budget surplus of 2.3 percent of GDP will ensure that Sri Lanka is well-placed to meet the gradual increase in debt service payments from 2028 onwards, he said.
The government will formulate the national export development plan (2025-2029) to increase Sri Lanka’s export of goods and services, and micro, small, and medium enterprises will be facilitated to tap new export markets, expand existing markets, or connect in the value chains of large-scale exporters and global value chains, he said.
With the view of removing limitations in access to high-quality, affordable raw materials, new tariff rates will be based on a national tariff policy to create a simple, transparent and predictable tariff framework, the president said.
Sri Lanka’s network of free trade agreements (FTAs) with strategic partners, particularly with a view to greater economic ties with the Association of Southeast Asian Nations will be expanded through the Regional Comprehensive Economic Partnership (RCEP) and other agreements, the president said.
The government aims to grow Sri Lanka’s digital economy to a level in excess of $15bn or 12 percent of the national economy over the next five years and the government proposes to allocate 3bn rupees to bolster the digital economy development, he said.
The president said the 2025 budget targets a deficit of 6.7 percent of GDP, slightly lower than the 6.8 percent deficit recorded in 2024, adding that the health sector will receive a substantial boost, with a budget allocation of 604bn rupees for 2025.
