ECONOMYNEXT \u2013 Sri Lanka has spent less than 30 percent of 2026 capital spending, two government sources said, with the government expects to fully utilize it before the end of this year.<\/p>\n
Sri Lanka has allocated Rs.1,380 billion for 2026 capital spending, but has spent only around Rs.385 billion through the first nine months of the year, two government sources familiar with the details told EconomyNext.<\/p>\n
Sri Lanka\u2019s 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.<\/p>\n
They warn of lower economic growth in the future if the government fails to implement its planned capital investment projects.<\/p>\n
The government has repeatedly said most of the spending occurs in the last quarter of the year.<\/p>\n
Cabinet Spokesman and Media Minister Nalinda Jayatissa said on Tuesday (06) that 70 percent of the spending is finalized in November and the government is unable to give an update on the total spending as of that day.<\/p>\n
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.<\/p>\n
This capital under-utilization carries severe long-term repercussions for the island\u2019s economic trajectory.<\/p>\n
By failing to deploy allocated funds into critical infrastructure such as transport networks, modernized power grids, and digital public systems, Sri Lanka suffers from lower productivity growth and worsening structural bottlenecks as well as a decline in overall gross domestic product (GDP) potential.<\/p>\n
In a fragile post-default macroeconomic climate, this persistent shortfall also sends a negative signal to international development partners and private investors.<\/p>\n
It demonstrates an institutional inability to absorb capital effectively, thereby stalling the very structural transformation required to safely out-grow a historic debt burden.<\/p>\n
President Anura Kumara Dissanayake\u2019s government has promised to change the process to fast-track the spending, but the move is yet to materialise, analysts say. (Colombo\/October 11\/2026)<\/p>","protected":false},"excerpt":{"rendered":"
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