Regardless of Sri Lanka’s progress made in the IMF programme, it is likely to continue to be within the IMF’s debt sustainability risk status, even after the programme ends, Deputy Minister of Finance and Planning Anil Jayantha Fernando said, speaking on Ada Derana 360 on Monday (15).
Responding to the IMF’s May 2026 IMF Staff Report, which stated that though Sri Lanka is nearing the end of its debt restructuring process, its debt sustainability risks remain high, Fernando said: “The risk is there at any moment. Whether this IMF programme was there or not, or when it comes to an end – this risk is there in the future. This is a general statement on the economy. Our responsibility is to show that risk is going to be managed and presenting it with data. That is what we did in 2025.”
The IMF statement outlined that though Sri Lanka’s programme performance remained generally strong, debt sustainability risks for Sri Lanka remain high.
“Programme performance remains generally strong, but efforts are required to complete public financial and investment management, and electricity sector reforms. Sustained revenue mobilisation is crucial to make the tax system more efficient and growth-enhancing and should be spearheaded by developing a medium-term revenue strategy. Debt restructuring is nearing completion, but debt sustainability risks remain high.”
“Under the present circumstances, when they report on risk, they estimate and present it. On our end, it is on us to manage the risk. What is meant by ‘high risk’ is, against the target they gave us,” Fernando said, referring to Sri Lanka’s debt-to-GDP ratio target, as outlined by the IMF in March of 2023.
In its Country Report No. 23/116, released in March of 2023, the multilateral indicated that Sri Lanka would have to commit to reducing the ratio of public debt to GDP to below 95% by 2032 from around 128% seen in 2022.
Sri Lanka’s central Government debt-to-GDP ratio was approximately 96.1% at end-2024 and 91.6% at the end of 2025.
“The debt sustainability target they gave us was a debt-to-GDP ratio of 95% by 2032. If we had not managed it, it would have been a risk if it exceeded 95%. But what happened instead, by 2025 we had reached 95%,” Fernando said.
Fernando pointed out that aside from the Sri Lankan Treasury cybercrime incident which involved the fraudulent diversion of $ 2.5 million in funds, which happened under exceptional circumstances, Sri Lanka has managed to meet a majority of the criteria set out by the multilateral, under its programme. However, he did not deny the possible risks that may extend from the vulnerabilities that the incident exposed.
“The financial fraud that happened at the Treasury was an exceptional circumstance. If there is a level of risk there, it’s possible.”