Foreign debt repayment due in 2026 is expected to be US$2,122 million

PDMO reshapes Sri Lanka’s finances

By Bandula Sirimanna ST 19-04-2026

Sri Lanka’s economic recovery has reached a pivotal institutional milestone with the Public Debt Management Office (PDMO) now fully operational in the Ministry of Finance.

Following the decisive implementation of the Public Debt Management Act, No. 33 of 2024, the nation has successfully transitioned its debt operations to the independent management office redefining the country’s credit credibility.

“The debt-ridden country stands on a stabilised foundation: As of April 15, 2026, the national debt-to-GDP ratio has been optimised with over 92 per cent of external debt restructuring agreements now fully implemented”, a senior official of the Finance Ministry told the Sunday Times Business.

By centralising borrowing strategy and enhancing transparency through the PDMO, it has evolved from a state of default to a regional benchmark for fiscal resilience and institutional reform.

This rapid institutional maturity was globally recognised recently when Sri Lanka received the prestigious Regional Debt Management Office Award for Asia-Pacific at the inaugural Commonwealth Public Debt Management Awards.

Total finance required for 2026 would be Rs 6,840 billion, including Rs 3,100 billion for outstanding treasury bills.

Foreign debt repayment due in 2026 is expected to be US$2,122 million, including $1,191 million as principal and $931 million as interest payments.

The Treasury is targeting a primary surplus of 2.3 per cent of GDP to maintain the IMF’s Extended Fund Facility (EFF) targets.

Sri Lanka is currently in the “implementation phase”, signing individual bilateral agreements to operationalise the June 2024 Memorandum of Understanding (MoU).

A bilateral agreement with Germany was formalised on April 9, 2026, to restructure 188 million in outstanding debt while the implementation of the agreement with Belgium has been finalised for rescheduling approximately 9.6 million.

The implementation of the China Exim Bank agreement is already concluded for $4.2 billion of debt.

IMF chief reaffirms continued support for Sri Lanka’s economic recovery

ST April 17, 2026

The Sri Lankan delegation, headed by the Governor of the Central Bank of Sri Lanka, Dr Nandalal Weerasinghe, has engaged in productive discussions with the senior leadership of the International Monetary Fund, World Bank Group, as well as with rating agencies and investors during the IMF-WB Spring Meetings 2026.

IMF Managing Director, Dr Kristalina Georgieva, congratulated Sri Lanka on reaching a staff-level agreement for the combined fifth and sixth reviews under the Extended Fund Facility and reaffirmed the IMF’s continued support for Sri Lanka’s efforts towards durable economic recovery and sustained progress, a statement said.

During discussions, Deputy Managing Director (DMD) of the IMF, Dr Kenji Okamura, commended the progress achieved by the Sri Lankan authorities despite significant global headwinds and domestic challenges.

The DMD acknowledged that the conflict in the Middle East has had asymmetric impacts across countries and emphasised that financial support measures to address these challenges should be well-targeted and time-bound.

He further underscored the importance of restoring cost-reflective energy pricing in a timely manner and encouraged sustaining reforms and policy discipline to strengthen resilience and support long-term growth, the central bank said in a statement.

The CBSL Governor expressed his appreciation to the IMF leadership for the flexibility shown in program parameters, particularly in light of the severe challenges faced by the country following the recent cyclone in Sri Lanka and evolving geopolitical developments.

He reiterated Sri Lanka’s continued commitment to undertaking reforms to enhance resilience, stability, and sustained economic growth.