Economy Stable, Not Collapsing : President Fires Back at Critics

COLOMBO (News 1st); President Anura Kumara Dissanayake has strongly rejected claims that Sri Lanka’s economy is on the verge of collapse, asserting that key financial indicators point instead to a period of stabilisation and historic progress under his administration.

The President said narratives predicting decline were being amplified by those responsible for past crises. “I know these days people are hearing that the economy is collapsing. Some even suggest abandoning everything and taking advice from those who caused this collapse,” he said, adding that his government had guided the economy toward meaningful growth despite inherited challenges.

Dissanayake highlighted Treasury revenue as a central indicator of recovery, noting that it reached 16.7% of GDP in 2025, the highest level recorded in three decades. He described this as a clear sign that public finances were strengthening. “For the first time in 30 years we are generating such a large volume of revenue. That means money is flowing into the Treasury,” he said.

Contrasting the present with the fiscal conditions of 2022 and 2023, the President recalled a period when the Treasury was plagued by an overdraft of approximately Rs. 800 billion. He said that situation had since been reversed, with reserves at one point reaching nearly Rs. 1 trillion before declining slightly due to disaster-related spending.

Nevertheless, he described the accumulation of such reserves as a significant milestone.

On fiscal management, Dissanayake emphasised improvements in narrowing the gap between government revenue and expenditure. While acknowledging that spending still exceeds income, he said the budget deficit has been reduced to 2.3% , the lowest level recorded in Sri Lanka’s history. “Since 1957, every Finance Minister has promised to bring it below 5%, but it never happened. Now, for the first time, we have achieved it,” he said, calling the development a major breakthrough in fiscal discipline.

The President also pointed to Sri Lanka’s external sector performance, noting that the country recorded a current account surplus of 1.7 billion US dollars last year , the highest ever. Historically, he observed, Sri Lanka’s current account has been dominated by deficits, with only three years recording modest surpluses of around 300 to 350 million dollars.

Further, Dissanayake highlighted the government’s achievement in its primary balance, which excludes debt interest payments ,stating that Sri Lanka recorded a surplus of 5.4% last year. This figure, he noted, more than doubled the International Monetary Fund’s target of 2.3%. “All these indicators show that we have brought the economy to a stable level,” he said.

Despite these gains, the President acknowledged that the country has faced considerable external and domestic challenges. 

Among them was a shift in United States trade policy under President Donald Trump, which introduced higher tariffs on imports.

Dissanayake said the move initially triggered fears of severe economic repercussions but noted that Sri Lanka had engaged in constructive dialogue with US authorities. “We are working to protect our export markets and will not allow them to collapse,” he said, adding that discussions were ongoing.

The President also pointed to the devastating impact of the Ditwah cyclone, which he described as having a greater economic impact than even the 2004 tsunami. According to World Bank assessments referenced by the President, the disaster affected approximately 3% of Sri Lanka’s GDP and caused damages exceeding 3 billion dollars. Widespread flooding and destruction left more than 6,000 homes completely destroyed.

In response, the government allocated Rs. 500 billion for recovery efforts, a figure Dissanayake compared to major infrastructure investments to illustrate the scale of the disaster. He noted that the Rambukkana–Galagedara expressway costs about Rs. 120 billion, while the Kurunegala–Dambulla expressway is estimated at Rs. 150 billion.

“The cost of Ditwah alone is 500 billion rupees. That gives you an idea of the scale,” he said, adding that many had expected economic growth to falter in the final quarter as a result.

Turning to the political landscape, the President accused opponents of attempting to destabilise the government, claiming that such efforts are driven by individuals facing corruption allegations. 

“Who wants to bring down this government? It is not the people. It is those who are corrupt, thieves and criminals,” he said.

He asserted that his administration remains resilient and committed to accountability. “This government cannot be shaken for decades. 

Those who are corrupt and fraudulent will be brought to justice,” Dissanayake declared, suggesting that growing agitation is linked to impending legal proceedings against certain figures. He insisted that his government would remain steady in the face of such pressures. “They want to create chaos. But we will not panic,” he said.