Sri Lanka, Oct. 20 -- Sri Lanka's total government expenditure is projected to increase 12.6% year-on-year to Rs. 4.993 trillion in 2027, from Rs. 4.434 trillion in 2026, with a sharp rise in capital investment alongside a borrowing ceiling that remains unchanged.

An analysis of the Appropriation Bill 2027 published by tax consultancy Ernst & Young (EY) Sri Lanka indicates that the planned increase in expenditure will be driven primarily by development spending rather than routine government operations.

Under the Bill's First Schedule, capital expenditure is projected to rise 24.7%, from Rs. 1.406 trillion in 2026 to Rs. 1.753 trillion in 2027. Recurrent expenditure, meanwhile, is expected to increase at a more moderate pace of 7%, from...