The Appropriation Bill 2025, presented on the parliament on January 9, 2025, allocates fund to the various ministries of the Sri Lankan Government for spending for the year at the same time setting up a borrowing limit for the entire year.

According to the bill, Sri Lanka has set a borrowing limit of Rs 4400 billion, which includes rollovers, the current expenditure has been set at Rs 4,218 billion and capital expenses at Rs 4,616 billion for 2025.

The Ministry of Finance, Planning and Economic Development has received the highest allocation in the 2025 Appropriation Bill, with Rs 714.7 billion where the recurrent expense allocation is Rs 484.9 billion and the capital expense allocation of Rs 229.2 billion. The Ministry of Defense has an allocation of Rs 382 billion as recurrent expense falling from Rs 365.2 billion in 2024 and capital expenses of Rs 60 billion. Other allocations include Rs 208.6 billion to the Ministry of Agriculture, Livestock, Land and Irrigation, Rs 271 billion for Ministry of Education, Higher Education and Vocational Education and Rs 496.5 billion to the Ministry of Public Administration, Provincial Councils and Local Government.

IMF directors emphasized the need for restoring fiscal sustainability by means of additional revenue measures such as the budget and further tax administration reforms, as well as limiting and increased transparency of tax exemptions. They also called for protecting growth enhancing and social spending and for improving the social safety net. The IMF noted that the budget had to be consistent with programme parameters with revenue measures approved ahead of the elections.

Based on IMF forecast Sri Lanka’s economy is expected to grow at 2% in 2024 and 2.7% in 2025. The third quarter data indicates that Sri Lanka's economy has grown by 5.2% of GDP during the first nine months of 2024. Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe has projected a GDP growth of 5% for the year 2024, with a minimum expectation of 3% growth in 2025.

Prof. Anil Jayantha Fernando said in the Parliament that Autoregressive Distributed Lag (ARDL) model used by the Government of Sri Lanka and the IMF for growth forecast was not good enough as it limited the Government’s ability to spend the money required to expand the economy. The ARDL model is a statistical model how variable’s current value is affected by its past value.