Speaking on the economic outlook, the Governor noted that earlier growth projections of around 4–5 percent may be exceeded due to additional government expenditure aimed at rebuilding infrastructure and supporting affected communities following the recent cyclone.
He said the government is planning public investments amounting to Rs. 1.4 trillion in 2026, while an additional Rs. 500 billion is expected to be allocated specifically for cyclone recovery efforts. According to Dr. Weerasinghe, this increased spending could provide a significant boost to economic activity across several sectors.
However, the Central Bank Governor also cautioned that higher levels of public spending could put upward pressure on inflation and increase demand for imports, posing potential risks to macroeconomic stability.
Dr. Weerasinghe emphasized the need for careful fiscal and monetary policy coordination to ensure that growth remains sustainable while maintaining price stability and external sector balance.
