Colombo (Agencies): Sri Lanka has announced a defence budget of LKR 442 billion (USD 1.5 billion) for 2025, reflecting a 3% increase from the revised 2024 allocation of LKR 430.4 billion. The budget prioritizes military operations, salaries, and procurement, even as the country faces economic challenges and IMF bailout conditions.
According to the newly published budgetary documents, LKR 382 billion has been designated for recurrent expenditures, including operational costs, personnel salaries, supplies, and maintenance. This represents a 3% year-on-year rise. Meanwhile, capital expenditure, which covers procurement and infrastructure development, has been increased by 1% to LKR 60 billion.
Breakdown of Allocations
- Sri Lanka Army (SLA): Receives LKR 225.5 billion, a 3% increase. However, its capital expenditure remains relatively low at LKR 5.4 billion.
- Sri Lanka Navy (SLN): Secures LKR 92.5 billion, marking a significant 12% increase, with LKR 19.3 billion allocated for capital expenditure.
- Sri Lanka Air Force (SLAF): Receives LKR 72.1 billion, reflecting a 4% rise, including LKR 21.4 billion for capital investments.
- Sri Lanka Coast Guard: Allocated LKR 642 million, with LKR 250 million dedicated to capital expenditure.
Despite the increase in defence spending, Sri Lanka continues to grapple with economic instability. Notably, the government has reduced social welfare funding by LKR 35 billion, leaving only LKR 43 billion for public assistance programs. This shift in budgetary priorities has sparked concerns, particularly as the country works to meet International Monetary Fund (IMF) targets for securing the next tranche of its $2.9 billion bailout package.
Fiscal analysts warn that Sri Lanka’s rising defence expenditure, coupled with its budget deficit projected at 6.7% of GDP—higher than the IMF’s target of 5.2%—could impact future financial assistance. Additionally, questions remain over the lack of development-focused allocations for the Northern Province, an area long affected by conflict and economic marginalization.
Despite these concerns, the government remains committed to bolstering national security while attempting to navigate its economic recovery. However, the balancing act between military spending and social welfare remains a critical challenge for Sri Lanka’s leadership.