Sri Lanka’s outstanding central government debt has a mere net increase of $1 billion during the first nine months of this year, as debt servicing exceeded disbursements, the Finance Ministry said in a published report.

According to the Budget, Economic and Fiscal Position Report released by the Finance Ministry with the Budget of 2026, outstanding central government debt increased by $ 1 billion during the first nine months to $ 102.24 billion, while increasing by 4.1% on year-on-year terms.

Outstanding domestic debt increased by $ 430 million to $ 65 billion during the nine months, representing an 8.4% year-on-year increase, whereas the outstanding foreign debt decreased by 2.6%, on year-on-year terms.

The report said that due to restricted access to international financial markets, the Government primarily relied on domestic sources to finance its fiscal deficit, with net domestic financing amounting to $ 1.53 billion, and net foreign funding having amounted to minus $ 171 million in the first eight months of this year, due to repayments exceeding disbursements.

According to the budget speech by President Anura Kumara Dissanayake, foreign debt service in this year amounted to $ 2,435 million, of which $ 1,948 million had been paid by 30 September. 

Another $ 487 million is set to be paid by 31 December of this year. Accordingly, this year’s  foreign debt service payments are an increase of $ 761 million compared to 2024.

During the period first eight months, total foreign loan disbursements amounted to $ 938.8 million, where the largest share of disbursements were recorded under the International Monetary Fund’s Extended Fund Facility (IMF-EFF), accounting for 73%, followed by disbursements under loan agreements with the World Bank making 11% of it.

For the year 2026, the government expenditure, including debt servicing, is Rs. 8,980 billion, of which Rs. 4,495 billion has been allocated for debt servicing. It includes Rs. 2,617 billion for loan interest payments and discounts, while Rs. 1,878 billion has been allocated for loan repayment.