2026 budget deficit reached Rs. 606.2 billion in Q1 despite claims of a primary surplus, says Ranjith Keerthi Tennakoon.
The 2026 budget deficit for the first quarter stands at Rs. 606.2 billion, despite reports claiming that the government has recorded billions of rupees in a primary surplus, Executive Director of the Sri Lanka Human Rights Centre Ranjith Keerthi Tennakoon said.
Issuing a statement, Tennakoon said a news story is being circulated claiming that there are billions of rupees in the primary account for the first quarter of 2026, but insisted that the claim is misleading and false when the full fiscal picture is examined.
According to him, government revenue for the first quarter of 2026 stood at Rs. 1,473.8 billion, while recurrent expenditure amounted to Rs. 688.9 billion.
He further pointed out that capital expenditure was Rs. 103.2 billion, bringing the total of recurrent and capital expenditure to Rs. 792.1 billion.
Tennakoon stated that the primary surplus is calculated as the difference between government revenue and total expenditure, excluding interest payments, and that this difference amounts to Rs. 681.7 billion.
Explaining the term, he said the primary surplus is the amount remaining after subtracting all government expenditure except interest payable on previous loans from total government revenue.
He said this can be simply expressed as: Primary Surplus = Government Revenue – (Total Expenditure – Interest Payments). However, he alleged that “Primary Surplus” is now being used as a technical term to mislead the country.
Tennakoon said loan interest for the first quarter of 2026 was Rs. 593.2 billion, while government debt repayment, including domestic and foreign debt, stood at Rs. 694.7 billion.
Accordingly, the total of debt repayment and interest payments amounted to Rs. 1,287.9 billion.
He pointed out that once these figures are included, the total budget deficit, or shortfall, for the first quarter becomes Rs. 606.2 billion. Therefore, although the primary surplus for the first three months of 2026 appears positive, the actual budget deficit remains Rs. 606.2 billion.
Tennakoon further stated that the deeper problem lies in capital expenditure, noting that only 7.5% of the capital expenditure allocated for the first quarter has been spent.
He added that capital expenditure is usually low during the first few months of every year, while government expenditure tends to rise during the final three quarters.
He also argued that “Primary Surplus” is not a reliable indicator of economic success. He pointed out that even in 2023, when the country was in a severe economic crisis, Sri Lanka recorded a primary surplus of Rs. 173,332 million.
Similarly, in 2024, the country recorded a primary surplus of Rs. 649,569 million, he said.
The Sri Lanka Human Rights Centre further stated that government groups, together with the Central Bank, are releasing statistical data through what it described as “technical wordplay” that has no real significance to the public.
