The Hon. Chathuranga Abeysinghe - Deputy Minister of Industry and Entrepreneurship Development

¶ 01 Hon. Deputy Chairperson of Committees, within my 12 minutes I wish to address our people at home and overseas who care about the economy.

¶ 02 We are on the right trajectory. Past governments over two to three decades drove us into a debt crisis. Hence in 2022 Sri Lanka entered an IMF program through 2027 to restore debt sustainability. On coming to office, we continued within this framework, meeting clear indicators. Fiscal discipline has reduced borrowing needs. Debt sustainability is now forecastable to 2030. We must look at exports, FDI, remittances, and tourism. In 2025, we achieved targets, including fiscal indicators. No one can now claim Sri Lanka is derailing.

¶ 03 Port City—269 hectares owned by the Sri Lankan Government—is a bonus opportunity. This Amendment strengthens the regulatory framework. The previous framework was inadequate for a global economic zone; rules-based incentives were unclear and overly broad—25-year concessions regardless of investment type. The Amendment standardizes incentives to global norms, enabling the Commission to approve pipeline investments that stalled last year.

¶ 04 Key changes include: - Offshore banking to be properly regulated by the Central Bank. - Equitable Personal Income Tax—removing the unfair tax-free status of zone employees relative to those outside. - Mandatory tax filing with IRD. - Fee structure changes to ease investor entry.

¶ 05 Further Ease of Doing Business measures will come next month.

¶ 06 Of the 269 hectares, about 178 hectares are for development and 91 for public utilities, plus a lagoon. Port City will position as a regional business hub beyond tax benefits, leveraging location: IT, financial services, shipping and logistics, professional services and corporate HQs, regional distribution centres, and tourism.

¶ 07 Regarding the IMF: on 27 November 2023, then-President Ranil Wickremesinghe agreed to remove concessions. When we came to power, we negotiated to retain concessions for the 24 previously-approved companies, though IMF initially opposed even that. We now align with global standards to proceed.

¶ 08 Four projects amounting to about US$ 1.2 billion were approved last July; these should commence in 2026. The team is confident. We are within IMF guidelines due to past fiscal mismanagement: inadequate revenue, excessive domestic borrowing, and ISBs led to US$ 4.4 billion external payments by 2019. Now, with restructuring, debt service gradually resumes; the burden rises through 2032, but by 2028 the additional requirement is modest—about US$ 700 million. We are on track.

¶ 09 In the pipeline, there are US$ 3.9 billion in prospective Port City investments; about US$ 1.4 billion already approved. Total build-out could reach US$ 15 billion. Under the DSA with the IMF, our annual FDI requirement is about US$ 1 billion, which we exceeded this year. Exports, FDI, remittances, and grants (after Cyclone Ditwah) are strengthening reserves and repayment capacity.

¶ 10 Growth projections: nominal 8.5 per cent next year, with inflation targeted at 5 per cent and real GDP at 3 per cent under the program. Government revenue is projected at 15.4 per cent of GDP, reducing debt service. Interest cost is projected to fall from 52 per cent to 35 per cent of revenue by 2030, enabling more on health and education. I urge the Opposition to avoid fearmongering. Sri Lanka is rebuilding; exports to target markets grew by 20 per cent in 2025, with strategic sectors like coconut up 40 per cent.

¶ 11 Thank you.