This 5th edition of the State of the Budget by Verité Research provides an independent analysis of the National Budget for 2026 presented to the Parliament of Sri Lanka on 7 November 2025. It evaluates the budget’s financial, economic, and fiscal assumptions; the accuracy and basis of its estimates; its compliance with the Public Financial Management (PFM) Act; and progress on previously raised concerns. The state of the Budget is set out in five main sections. Section 1 introduces the report’s objectives and the context of Sri Lanka’s budget formulation process. Section 2 assesses the quality and coherence of budget information, and identifies any inconsistencies across documents, missing estimates for new proposals, and gaps in adherence to the PFM Act. Section 3 evaluates the budget’s macroeconomic assumptions for key indicators and examines their implications for fiscal sustainability and debt dynamics. Section 4 analyses the government’s revenue estimates, with a detailed focus on several tax categories. Section 5 reviews selected expenditure components that have posed challenges in previous years.