Srilanka, Feb. 18 -- Budget 2025 sets out a total government expenditure of LKR 7,190 billion, marking a 17% increase from the LKR 6,131 billion allocated in 2024. As a share of Gross Domestic Product (GDP), government spending is set to rise from 20.4% to 21.8%.

A significant portion of the budget-LKR 2,950 billion-is earmarked for interest payments, accounting for 41% of total government expenditure and 59% of estimated revenue.

The government's primary expenditure (expenditure excluding interest payments) stands at 12.9% of GDP. This figure is in line with the 13% limit outlined in the Public Financial Management Act, even though that particular fiscal rule has been subject to criticism for being theoretically and empirically ungrou...