Fitch Ratings has warned that shortfalls in planned investment spending could weaken Sri Lanka’s growth potential and complicate long-term fiscal consolidation.

The agency noted that while the 2026 budget targets a 5.1% GDP deficit and a 2.5% primary surplus, continued strong revenue performance and adherence to IMF fiscal markers are crucial for macroeconomic stability.

Fitch highlighted underspending in 2025, when public investment reached 3.2% of GDP versus a 4% target, as a factor limiting growth. 

The 2026 budget includes measures to boost investment, such as airport expansion, a Rs. 342 billion allocation for road development, tax incentives for digital infrastructure, and increased use of public-private partnerships.