Sri Lanka Targets Debt Completion Amid Cyclone Recovery 📈

• Overall Progress & Stability Treasury Secretary Dr. Harshana Suriyapperuma confirmed Sri Lanka is on track to finalize external debt restructuring. Public debt has dropped significantly to 105% of GDP (mid-2025) from a 2022 peak of 145%. Macroeconomic stability remains resilient, supported by nine consecutive quarters of positive growth. • IMF & Fiscal Update The IMF EFF 5th review is set for approval in early 2026, unlocking a US$ 350 Mn tranche. • Primary Balance: Improved from a 3.7% deficit (2022) to a 3.8% surplus (2025). • Revenue: Vehicle import relaxation generated Rs. 904 Bn in taxes, doubling projections. • Reserves: Current account recorded a US$ 1.7 Bn surplus in 2025. • Debt Restructuring Breakdown Agreements now cover 99% of external debt, with 92% fully restructured. • Bilateral: Agreements signed with 9 OCC members (Japan, India, etc.) for US$ 4.2 Bn. • Commercial: 98% of International Sovereign Bonds (ISBs) were exchanged by Dec 2024. • Ratings: Upgraded to CCC+ by all major agencies post-bond exchange. • Cyclone Ditwah Impact The late-2025 cyclone caused US$ 4.1 Bn in damage (approx. 4% of GDP). • Recovery: US$ 1.62 Bn allocated in the 2026 Budget for housing and transport reconstruction. • Funding: US$ 206 Mn secured via IMF emergency financing; Rs. 8.5 Bn raised via local funds. • Sector Performance Tourism saw record arrivals of 2.34 Mn in 2025, with a strong Q1 2026 rebound. SOE reforms continue, focusing on unbundling the CEB and cost-reflective pricing.