"In this regard we recognize that achieving the stated revenue targets whilst managing expenditure will be an enormous challenge, particularly in view of the increasing defense expenditure and the colossal burden of debt service.
"This will require a very careful and disciplined management of the economy."
The 2007 budget was blamed by economic analysts for creating 19.6 percent inflation, a mid-year balance of payments crisis as well as high interest rates.
Sri Lanka has a bloated public sector which is eating up more than half of the government's tax revenues. Over last three year state jobs have been distributed to more than 100,000 people.
Next year the government promised to hire 15,000 new unemployed graduates.
In Sri Lanka the public sector gets tax free salaries, tax-slashed cars, housing loans at subsidized interest and tax-payer funded tax-free pensions.
Even the contributory pension funds of private sector workers are taxed.
"[The] singular lack of reference to improving the productivity of the large and growing public sector is indeed disappointing," the Chamber said.
The chamber welcomed measures to improve domestic industries such as dairy and agriculture, as well as the apparel, gems, jewellery and shipping sectors.
The Ceylon Chamber said it was encouraged by a commitment of the government to reduce the budget deficit, increase investments on infrastructure and to support identified sectors of the economy.
"We also note that a number of initiatives being undertaken by the Government could be better served through appropriately structured public-private partnerships," it said.
The Ceylon Chamber said it will continue to interact with the authorities towards achieving the development objectives of the nation in a private sector friendly manner.