Sri Lanka’s pitch to investors comes with a timetable where within two months, the government expects to seek proposals for a privately backed logistics centre at the Port of Colombo. In early 2027, it plans to take a public-private partnership law to parliament.
Both will offer early tests of whether President Anura Kumara Dissanayake’s third budget can turn economic stability into projects businesses are prepared to finance.
Presenting the Budget to parliament yesterday, Dissanayake traced a progression from stabilising the economy in his first budget to giving greater weight to production, investment and institutional reform in his second. The third, he said, would put those reforms into effect.
“The main objective of this Budget is to move from economic stability towards transformation. It is to achieve a progressive transformation in every sphere, including investment, exports, productive employment, social welfare and sustainability,” said President Dissanayake.
The President pointed to 5 percent growth in 2025 and foreign reserves of more than US$ 7 billion by October 2026. His opening remarks also showed why the shift to investment comes at a difficult time. Growth eased to 4.2 percent in the second quarter from 5.1 percent in the first, while annual inflation rose to 8.3 percent in October from 2.1 percent last December. Dissanayake cited higher fuel prices, rising import costs and supply chain disruptions linked to the Middle East conflict. For investors, some of the most consequential proposals are still in the hands of lawyers and procurement officials. The draft Investment Protection Bill is with the Attorney General and would provide for fair and equitable treatment, compensation and dispute settlement. Proposed amendments to the Colombo Port City Economic Commission law are also under legal review. The Budget allocates Rs. 100 million for a National Single Window for Investment, with bids for a consultancy to establish it still being evaluated.
The project pipeline is taking shape at different speeds as the Colombo logistics centre has a timetable for seeking proposals. In minerals, a committee has been appointed to select an investor to process sands mined by Lanka Mineral Sands Ltd., while the search for a partner for the Kahatagaha graphite project will follow an assessment of the mine’s reserves. For smaller businesses, the immediate question is how much funding reaches them. The Government expects Rs. 67.69 billion in interest subsidies and refinancing to support Rs. 174 billion in concessional loans through State and private banks. That includes a proposal to support a further Rs. 20 billion in loans at 5 percent under Re-MSME Plus for capital and working capital. A proposed mechanism to help small and medium-sized companies list on the Colombo Stock Exchange would give eligible firms another way to raise capital. The Budget also allocates Rs. 4 billion for work on industrial estates and Rs. 1.99 billion for the National Single Window for Trade. Following a pilot covering selected goods, exporters are expected to be connected in the first half of 2027, with importers and re-exporters to follow in the second half.
The Government also working to expand the existing free trade agreement with India, has applied to join the Regional Comprehensive Economic Partnership and is pursuing economic partnership agreements with the United Arab Emirates and Oman.
