Sri Lanka’s 2026 capital spending under review; Minister optimistic on full utilization
ECONOMYNEXT – Sri Lanka’s 2026 capital spending is under review and hopefully, it will be fully utilized, Cabinet Spokesman and Media Minister Nalinda Jayatissa said, amid fears of under spending the total allocation of Rs.1,380 billion for this year.
Sri Lanka had spent only 17.4 percent of the allocated total capital expenditure as of mid-June and Minister Jayatissa did not provide the latest amount spent on public investment.
“We monitor this quarterly. Only in the final months of the year do invoices start arriving, payments finalize, and projects conclude,” he said when asked about the total expenditure on capital investment so far this year.
“Usually, 70 percent of the completion is towards end of November. We are at the moment reviewing. We are unable to reveal the total figure at the moment.”
Sri Lanka’s chronic failure to utilize its full budgetary allocations for capital investment reflects deep-rooted structural inefficiencies in public financial management and project execution, analysts and economists say.
They warn of lower economic growth in the future if the government fails to implement its planned capital investment projects.
Year after year, bureaucratic delays, protracted procurement disputes, politicized project selection, and a lack of technical expertise within line ministries leave a significant portion of capital expenditure unspent on the Treasury books.
This capital under utilization carries severe long-term repercussions for the island’s economic trajectory.
By failing to deploy allocated funds into critical infrastructure such as transport networks, modernized power grids, and digital public systems, the state stifles productivity growth, worsens structural bottlenecks, and lowers the country’s overall gross domestic product (GDP) potential.
In a fragile post-default macroeconomic climate, this persistent shortfall also sends a negative signal to international development partners and private investors.
It demonstrates an institutional inability to absorb capital effectively, thereby stalling the very structural transformation required to safely out-grow a historic debt burden.
President Anura Kumara Dissanayake’s government has promised to change the process to fast-track the spending, but the move is yet to materialise, analysts say. (Colombo/June 15/2026)