Sri Lanka will slash its army by a third to 135,000 personnel by next year and to 100,000 by 2030, the state minister of defence said on Friday, as the island country tries to cut costs in the face of its worst economic crisis in more than seven decades.

"Military spending is basically state-borne expenditure which indirectly stimulates and opens avenues for economic growth by way of assuring national and human security," state minister of defence Premitha Bandara Thennakoon said in a statement.

“The overall aim of the strategic blueprint is to broach a technically and tactically sound and well-balanced defence force by the year 2030 in order to meet upcoming security challenges,' Thennakoon said. The defence allocation of 539 billion rupees in the budget 2023 drew criticism as the island nation faced its worst economic crisis since 1948.

Due to the forex shortage, Sri Lanka was unable to afford key imports, including fuel, fertilisers and medicines, leading to serpentine queues. The share of the defence sector in Sri Lanka's total expenditure peaked in 2021, at 2.31 percent of gross domestic product (GDP), but fell to 2.03 percent last year, according to Colombo-based think tank Verite Research.

The island nation of 22 million people has been forced to cut back on government expenditure after it slid into a deep economic crisis last year when foreign exchange reserves dried up.

President Ranil Wickremesinghe said last year that military strategy reforms were needed to gear the island’s army to face new challenges.

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