Sri Lanka aims to accelerate economic growth, expand free trade agreements (FTAs), and strengthen its digital economy as part of its 2025 budget, President Anura Kumara Dissanayake announced on Monday.

Presenting the first budget of the National People's Power (NPP) government, which took office in 2024, the president outlined a vision for over 5% real GDP growth in the medium term.

The government expects exports of goods and services to reach a record $19 billion in 2025. Strong non-debt financial inflows, along with robust economic growth and a primary budget surplus of 2.3% of GDP, will position Sri Lanka to meet rising debt service obligations starting in 2028, Dissanayake stated.

To boost exports, the government will implement a National Export Development Plan (2025-2029), enabling micro, small, and medium enterprises (MSMEs) to access new markets, expand existing ones, and integrate into global value chains. A new national tariff policy will simplify and streamline import duties, ensuring easier access to high-quality, affordable raw materials.

Sri Lanka also plans to enhance its FTA network, particularly strengthening ties with the Association of Southeast Asian Nations (ASEAN) through the Regional Comprehensive Economic Partnership (RCEP) and other trade agreements.

The government is setting ambitious targets for the digital economy, aiming to grow it beyond $15 billion—or 12% of the national economy—within five years. To accelerate this transformation, 3 billion rupees (approximately $10 million) will be allocated for digital development initiatives.

The 2025 budget projects a fiscal deficit of 6.7% of GDP, a slight improvement from the 6.8% recorded in 2024. The health sector will receive a significant allocation of 604 billion rupees (around $2.04 billion) to enhance medical infrastructure and services.