The country’s economy is stable

• Do not even think of conspiring to destabilise the country

– Says the President in Parliament

President Anura Kumara Dissanayake stated that, as a result of the immense sacrifices made by the government over the past year or so, the country’s economy has now reached a stable and strengthened path. He further said that the upcoming budget will ensure the continued flow of economic benefits to the people.

The President said that some individuals are constantly dreaming of an economic collapse in the country, but he emphasised that such a scenario will never materialise. Therefore, he urged them to choose an alternative political path.

President Anura Kumara Dissanayake made these remarks in Parliament today (07) while participating in the adjournment debate to discuss the country’s economic situation.

The President appealed to the opposition not to engage in any political activity that would cause instability or economic uncertainty in the country, regardless of their ambitions to come into power. He invited everyone to work together in good faith to lift the country and its people out of their difficulties and create a better standard of living for the citizens.

Following is the full speech delivered by President Anura Kumara Dissanayake in Parliament:

I am deeply grateful for the opportunity to present a few points regarding the economy during this debate, which is specifically focused on the country’s economic situation.

In recent times, given various international and domestic developments, many hoped the government would collapse. After certain tensions between India and Pakistan, some participants in media discussions even expected bombs to fall on Colombo. But during that conflict, our Defence Secretary and military Commanders were actually in Lahore, Pakistan. The opposition expected a bombing in Colombo.

Later, when an international conflict erupted between Israel and Iran, they again anticipated an opportunity would arise for them. But that too did not happen. Then came their greatest hope, that the country’s economy would collapse due to the new tax policies imposed by the United States. Just two days ago, I saw someone claim that U.S. taxes were rising not just to 30%, but to 44%. That’s merely wishful thinking. They claimed India’s rate would fall by 15–20%. The opposition is constantly trapped in a cruel, destructive dream that the country’s economy will fail. But such a collapse will never happen.

I wish to clarify the issue of the U.S. tariff imposed on us. The announcement was made on 2nd of April and came into effect from 9th April. When the United States imposes such a tariff, it is based on a principle. The percentage is set at about half of the trade deficit between the two countries. The trade deficit between the U.S. and Sri Lanka is 88%. So, half of that, 44%, is the basis for the tariff imposed on us. That is how we received a 44% tariff. I noticed the opposition also claimed that this 44% tariff was evidence of the government’s failure. But it is not a government failure; it is a result of the principle adopted by the U.S. when imposing such tariffs.

It must be openly acknowledged that we entered into these negotiations with the United States at a time when we were in a difficult position. We have reached an agreement with the International Monetary Fund (IMF). On the other hand, due to the vast differences in population size and economic scale between the United States and Sri Lanka, comparisons and alignment present significant challenges.

Additionally, over 25% of our exports are directed to the United States, which poses a risk of significant impact on our export-driven economy. Nearly 60% of our apparel exports are sent to the United States. Therefore, there exists a risk of direct impact on the livelihoods of nearly 350,000 workers employed in the sector. Hence, we entered into these discussions from a challenging and disadvantaged position. Accordingly, we appointed a highly competent and robust negotiation team.
At no stage did we feel the need to have fireworks displays or perform theatrics through the media during each step. However, we were fully aware of the depth and seriousness of this crisis.

Therefore, we continuously engaged in discussions and took the necessary steps forward. Our objective was to conclude these discussions positively and resolve the issue in a manner that would not negatively impact on the country’s economy. We successfully overcame that particular challenge. The United States presented us with a number of proposals during the process.
We are still at the discussion level regarding those proposals.

As of now, no final agreement has been reached and no deal has been signed. However, we have reached some levels of consensus in these talks. As a result of the negotiations, we were able to reduce the tariff rate to 20%, which is a notable outcome. We consider this a significant milestone in the mutual understanding reached between both parties. Our negotiation team achieved this success by continuously assessing and discussing the potential impact on local businesses and industries.

This was not a backroom conspiracy hatched by a handful of individuals, but a process of consistent and open dialogue with all relevant stakeholders. Thus, the opposition’s allegations regarding U.S. tariffs will end here. We faced three major external challenges: the U.S. tariffs, the IMF programme and the GSP tax concession scheme.

Various groups have spread misinformation in society regarding the IMF programme. We began negotiations with the IMF on the 16th of November.

We successfully concluded the third review. We managed to defer the implementation of the service tax. We have also properly concluded the fourth review. There was widespread social unrest concerning electricity tariffs. The Ceylon Electricity Board had driven the Ceylon Petroleum Corporation and two state banks into a crisis. The funds meant to be provided to those institutions were taken over by the Treasury.

The government has now prepared a clear action plan to safeguard the banks and the Petroleum Corporation. We are of the view that the government must have a presence in both the financial market and the energy market in terms of policy direction. The state’s role must be represented within the financial markets. Prices must be adjusted in line with production costs. We agree with the pricing formula based on this principle. If such adjustments cause hardship to consumers, the government will act to provide relief.

Some state institutions were bankrupt; others had zero balances in their accounts. The electricity tariff was determined after carefully considering all of these factors. However, the Opposition Leader announced the new tariff before the government did. The former government had the opportunity to reduce electricity tariffs in 2024. Yet, they failed to do so. We are continuing to implement programmes in collaboration with the IMF. The GSP tax concessions have provided some relief in accessing European markets. If the economy becomes stable, we can endure the absence of these concessions.

However, as of now, we still require the GSP concessions. Protecting human rights and democracy in our country is a responsibility of the government. In recent times, the only government to have safeguarded democracy and human rights has been the current one.

We have planned to manage the external shocks affecting Sri Lanka in a well-structured manner. The government currently in place has a genuine desire to serve the people. Without creating economic strength, it is not possible to provide relief to the public. The sole challenge faced by this government was to rebuild the collapsed economy. For a whole year, the government has successfully maintained the dollar at around Rs. 300. The opposition expected the dollar to rise to Rs. 400. The black market economy is collapsing. The volatility in the exchange economy is gradually decreasing. Today, no industrialist has uncertainty regarding the dollar. For the first time in Sri Lanka’s history, the dollar has remained stable for a year.

When examining Sri Lanka’s export income data from 2015 to 2025, it is evident that the highest-ever export earnings were recorded in the first six months of this year. The export market has been diversified. Of our total exports, 25% go to the United States and 23% to the European Union. Therefore, any tariffs imposed by these countries have a significant impact on Sri Lanka. This is why the government has planned to further diversify exports.

We do not intend to rely solely on two or three powerful countries or a few export markets in the future. Comparing June last year with June this year, exports to the African market have grown by 57%. Looking at the Asian market, export activity has expanded by 26% compared to the previous year.

We are providing the necessary infrastructure for industrialists. In return, they must pay taxes to the government appropriately. When looking at the tourism sector, this year’s revenue has increased by 10% compared to last year. Therefore, 2025 will become the year with the highest export income and the highest tourism revenue in Sri Lanka’s history. We believe that certain incentives must be provided to encourage foreign direct investment.

This year is becoming the year with the highest foreign investment. We need foreign direct investment (FDI). However, we are not a country with vast raw materials or a large market. Attracting FDI requires overcoming major difficulties. Therefore, some incentives must be provided for FDI. In the first six months of last year, FDI amounted to USD 252 million. In the same period this year, it has reached USD 507 million, which is a 101% increase. We expect to earn over USD 1 billion in FDI this year.

The Colombo city development project must proceed. Approval has been granted for USD 1,313 million in FDI for this purpose. We must plan accordingly and channel these funds towards development. We bear the burden of past destruction, but we have the opportunity to lead the country towards prosperity.

By this December, we will have foreign reserves of USD 7 billion. After five years, we have reopened the vehicle market. As of today, letters of credit worth USD 1,268 million have been opened. Our country has vehicles that are 15 to 20 years old, which can no longer run on the roads. The vehicle sector itself is an industry and must be linked to the national economy. By this December, we expect letters of credit to be opened amounting to USD 1,500–1,800 million.

However, there are conspiracies to create pressure on the dollar. Rumours are being spread that vehicle imports will be halted. We wish to assure our citizens that vehicle imports will not be restricted. The open market will continue to operate in its current form.

If you cannot buy a vehicle this year, you can buy one next year. Do not engage in actions that harm the country’s economy. There are claims that taxes will be increased, we assure you that taxes on vehicles will not be raised. A country cannot progress by shutting down industrial opportunities. Our aim is to ensure the free movement necessary for the economy. Doubts being raised about our dollar reserves are baseless.

Similarly, domestic investments through the Board of Investment have increased. Compared to last year, domestic investments have grown by 18% this year. This leads to job creation and enhanced economic growth.

This year has shown signs of becoming the best year for dollar inflows, direct foreign investments, tourism sector and export earnings. When presenting the budget document, we anticipated revenue of approximately Rs. 4.5 trillion. Many said this revenue target was unattainable. They claimed the government was creating an illusion using numbers.

The Inland Revenue Department, Customs and the Excise Department have been effectively restructured, increasing their efficiency and working to recover taxes from those evading payment. A list of 200 major tax defaulters has been compiled, with the total value estimated at 100–150 billion. These amounts must be recovered. Is that wrong? There are groups who have defrauded state banks, including politicians and businessmen. We have ensured transparency and independence within the banks.

On the revenue side, we have reached a stable and strong level. All sectors have exceeded their revenue targets. We are capable of generating 4.5 trillion in revenue. By July, the Inland Revenue Department surpassed its target by 101%, the Customs Department by 115% and the Excise Department exceeded its Rs. 136 billion target, reaching Rs. 143 billion. During the first seven months, all three major sources of tax revenue have surpassed the goals we set. Therefore, revenue generation for the government is not a concern.

There is a crisis in the sugar industry. Production costs are high, there are too many workers and the industry has not been modernised. Due to various reasons, the price of sugarcane was increased three times, resulting in higher costs to produce a kilo of sugar. So what should we do now? Either sell below production cost and let the treasury absorb the loss, or impose taxes on imported sugar to stabilise the price. Are we now willing to impose such taxes? At the very least, a tax of Rs. 50 must be charged. No one should insist on removing taxes from specific sectors. Taxes will be collected from all sectors, while subsidies will be given where appropriate. The government is granting Rs. 1 billion to sugar companies. Reducing taxes serves no purpose if no taxes are paid and salaries are not paid. This issue will be resolved starting this week. We are operating under a rebuilding plan.

Today, the government has Rs. 1,000 billion. If treasury bonds are issued, we are the primary buyer. In the past, artificial conditions were created. Today, we can no longer afford such manipulation. We are regulating the market and stopping distortions. Isn’t that how a country should be governed?
When we reflect on the indicators used to assess whether the economy is good or bad, we can see that we have managed to bring the country to a stable position. If the opposition believes the country will collapse due to an economic breakdown that will not happen. In recent times, the economy collapsed due to economic pressure. Then, governments fell due to political crises. People came to the streets and overthrew governments. Some fell through elections. Let it be clear: this government will not fall through any of those means.

No one should believe that the power of their own network or circle makes them immune to the law. Yet, such a mindset exists in this country. In a nation where some citizens cannot access justice, even those who can often refuse to submit to the law. Therefore, if we are to rebuild the country, we must once again establish the supremacy of the rule of law.

When the rule of law is enforced, the law will reach even those who once believed they were untouchable behind their powerful networks. We have extended our full support to the Criminal Investigation Department and provided the necessary resources and authority to the Bribery or Corruption Commission. They have been empowered to carry out their duties and the law is now actively pursuing criminals.

A court order has been issued to arrest a former Navy Commander. However, some are now holding media briefings and claiming that these actions are meant to appease the LTTE diaspora. Let me be clear we have no intention of appeasing anyone. We seek to serve and bring justice to the citizens of this country. Today, criminals are aware that the law is behind them. When a Personal Secretary is summoned to testify, they know exactly what is happening. Before the law reaches them, some attempt to create instability in the country a pattern we’ve seen in the past. This leads to intimidation of law enforcement officers. There have been times in history when officials were even imprisoned for simply conducting fair investigations. There are efforts underway to instil fear among officials.

However, we have empowered our officials with the leadership, courage and authority they need. Moreover, we are fully committed to protecting them whenever necessary. Whether we are in government or outside of it, we will stand by every official who is dedicated to upholding the law in this country. Even if we are not in power, as responsible citizens, we assure you that we will continue to protect those officials committed to justice and integrity.

I say to the Opposition if you believe this government is unnecessary, then present a programme that shows you are needed. In that case, there is a path forward a conversation we are willing to have. If you believe we are not doing enough for the development of this country, then present your reasoning. We are doing what needs to be done in this moment. If there’s more that should be done, tell us what that is. We inherited a country that had come to a standstill. Many development projects funded by foreign assistance had been suspended. However, today we have revived the economy. For example, the Mirigama–Kadawatha expressway project was originally funded by China’s EXIM Bank. The loan amount granted back then is no longer sufficient a larger loan is now needed.

Therefore, discussions must be held to revise the funding. I’m pleased to announce that the EXIM Bank of China has agreed to provide a new loan in Yuan at highly concessional interest rates. We will present this to the Cabinet on Monday, and once approved, work on the expressway can commence.

This year, we will begin work on several major projects including the Katunayake Airport and the Kadawatha–Mirigama expressway. We are also making maximum efforts to secure foreign funding for the construction of the Galagedara–Kandy expressway. If those efforts are unsuccessful, we will begin construction next year using domestic funds.

Furthermore, we must swiftly move forward with renewable energy projects. We are actively initiating such projects. We are also working to expand the capacity of the Ceylon Petroleum Corporation. Six new oil storage tanks are being built in Kolonnawa. Additionally, the long-delayed rehabilitation of the Trincomalee oil tank farm has now commenced.

Stabilizing the energy sector is critically important. Due to the failure to manage past deals by previous leaders, citizens are now paying significantly higher prices for energy. We have now called for tenders to address this.

For nearly a year, we have worked tirelessly to stabilize the core fundamentals of this country’s economy. Our financial markets must never again fall into uncertainty. As leaders, we all carry the responsibility of ensuring that. The people of our country must never face a second round of this kind of economic crisis. To avoid this, it is essential to establish a robust and resilient economy from the foundation onward.

We need a country where the rule of law is firmly established. Engage in politics as you wish but never even dream of weakening the enforcement of justice against the corrupt. I urge everyone to support the actions necessary to hold wrongdoers accountable. We have begun the effort to rebuild and restore this country. We are not a group who entered politics for personal gain or ambition. Today, for the first time, both local and international investors, industrialists and entrepreneurs know that Sri Lanka’s political authority is not engaging in theft.

This is crucial for investment and equally important for building a strong and respected presence on the global stage through sound diplomatic relations. Once, at the United Nations Human Rights Council, our country was perceived in a negative light. For the sake of future generations, we must clean this nation. We must turn this country into a place where our children can live with pride.

To do that, the first step is to establish the supremacy of the law. The second is to ensure economic prosperity. The third, we must dismantle the criminal underworld that lurks beneath our society. We know that the underworld, narcotics trade and organized crime are all interconnected and we are confronting them head-on. But we ask for a little more time. This crisis must be overcome. In doing so, we must act with patience and well-thought-out planning.

We have laid out plans to rebuild this nation to uplift the economy, ensure a better quality of life for our citizens, create a brighter future for our children, provide high-quality healthcare and develop a modern transportation system. We are rebuilding a nation that was once brought to its knees. That is why we are moving forward with this programme in a stable and determined manner. Let no one even consider trying to obstruct this journey. Do not forget the law stands firm.

As we prepare the upcoming budget, we are engaging in consultations with all sectors of society. We are doing our utmost to find solutions to their concerns. This country must transform into an enlightened state once again. For that, we are working with unwavering commitment.

You are free to engage in politics but if anyone tries to create chaos in the country as a means to evade justice, we will not allow it. If any group, from anywhere whether underworld elements or defeated factions attempts to engage in political conspiracies, we will not allow those plots to derail this journey toward rebuilding our nation.

If the current legal framework is insufficient, we will create the necessary laws. This country must be rebuilt. No one should drag the nation into turmoil simply because they lost their privileges or fear the consequences of justice. Previous governments may have fallen victim to such conspiracies.

However, we have already identified these actions. Therefore, if anyone whether, within or outside the state attempts to sabotage the journey to rebuild this country through conspiratorial means, we will take every possible step to defeat such efforts. Today, various distorted claims are being made.

But we recognize both the sound at the door and the beating of the drum, we can distinguish truth from deception. So if anyone is even contemplating conspiracy, we will not allow it. You may continue with your politics. But we have now brought the country to a much better path. We are rescuing both the nation and its people from disgrace and hardship. That is our determination and we are working toward it. We request sincere support from the opposition for this cause.

A challenge has arisen regarding district development and I assure you, we will address it next. The allocations were genuinely made for the districts. Each Member of Parliament was expected to submit a sufficient number of proposals aligned with the allocated funds for their respective district. When we presented the budget, our expectation was that all MPs would receive their respective allocations. Once the funds were allocated to a district, corresponding proposals were expected from every MP within that district. However, I have received reports that this process has broken down in some areas. I give you my assurance that such lapses will not be allowed in the next year.

We tabled the budget document on March 21st. Shortly after that, the provincial council elections were called and those concluded on May 6th. During that period, the Election Commission imposed restrictions, which delayed implementation of some of the proposed projects. Therefore, the real work could only begin after May 6th. That left a limited window, especially since all projects must be completed by December 31st. As a result, some MPs may have missed opportunities to submit their proposals in time.

In our system, activities commence only after funds are allocated to the relevant Ministries. But all funds allocated under the 2025 budget will be fully disbursed. We now have the capacity to release those funds. Some delays have occurred in implementation, but moving forward, claims of budgeted funds being withheld will not arise. From 2026 onward, funds will be available starting in January, immediately after the budget is approved. This will ensure early commencement of projects.

We do not engage in the kind of politics where funds are withheld from certain individuals. Every Member of Parliament will receive the funds allocated to them. Moreover, in the upcoming budget, we also expect to provide a concessionary vehicle on a returnable basis for use during their term of office.

We have laid a very strong foundation for a positive journey, and this is the path we are committed to follow. You are free to represent a different political party and work toward gaining power that is perfectly acceptable. However, I urge you not to engage in conspiracies, not to create instability in the country and not to generate uncertainty about the economy. I request this from everyone.