The Sri Lankan government will revisit the decision to increase state worker salaries in 2025, according to Minister Vijitha Herath. The previous cabinet had announced a salary hike starting from January 2025, based on recommendations from a committee led by Udaya Seneviratne, which also included plans to reduce the size of the public service over time.
Minister Herath explained that the decision was made without the required observations or approval from the Finance Ministry, making the decision arbitrary. “It should have been made after considering the financial situation and the Treasury’s agreement to the salary increase,” Herath stated during a press conference.
While the salary increase is not off the table, Minister Herath emphasized that it will be re-evaluated after assessing the country’s financial health. The government will present a budget, take observations from the Finance Ministry, and make a final decision accordingly.
The initial estimates suggested the salary hike could cost around 200 billion rupees per year. Wage earners have already seen a decline in real wages due to inflation and the depreciation of the rupee, which fell from 200 to 360 against the US dollar before stabilizing below 300.
Although real wages have slightly improved with some salary increments given earlier this year as tax revenues increased, wages remain below levels seen last year, highlighting the importance of careful financial planning before implementing further hikes.