ECONOMYNEXT – Sri Lanka’s economic growth should not have a major impact from the current delay in implementation of public investment projects with the government taking steps to fast track them, Central Bank Governor Nandalal Weerasinghe said.
The island nation has allocated Rs. 1,315 billion ($4.38 billion) for public investment through capital expenditure. However, only less than 20 percent has been used so far in the first seven months of the year due to delay in budget approval, procurement process and recruiting technical officers to handle such projects.
Analysts have said such delay could dent future economic growth. Sri Lanka has to ensure at least 3 percent economic growth to start foreign debt repayment in 2028 in line with the IMF targets.
“The government has already allocated money.,,,The allocation has not been fully spent. I think it’s because of the election and all these things. And I think hopefully it will start from the second half and next year. Once that is implemented, that part will be more active,” Weerasinghe told reporters on Wednesday at the post-monetary policy media briefing.
“I have seen the government is very keen to implement the expenditure that has been allocated. Public investment is the government’s fiscal policy responsibility. I’m sure they will be keen to implement it, because if you look at the revenue, it is doing well.”
“I don’t see a reason why this measure cannot be… implemented going forward.”
Sri Lanka’s economy grew at 5 percent last year from a lower base and the government expects a similar expansion this year as well.
However, analysts say the reciprocal tariff by U,S. President Donald Trump and delay in this year’s public investment projects could deter the pace of the economic growth.
The IMF has estimated Sri Lanka’s economic growth at 3.5 percent for this year. (Colombo/July 24/2025)
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