A few years ago, the biggest question hanging over the economy was simple: Can the country repay its debt?
Today, according to CBSL Governor Dr. Nandalal Weerasinghe, the answer looks far more positive.
The Governor says recent economic improvements have strengthened the country’s ability to repay both domestic and foreign debt. More importantly, he pointed to a key indicator that investors, lenders, and global markets watch the debt-to-GDP ratio closely.
According to Dr. Weerasinghe, the country’s debt burden has declined from 105 percent of Gross Domestic Product to 95 percent. He attributed the improvement to stronger public debt management and ongoing economic reforms.
Why does this matter?
Because a lower debt burden generally means a country is in a better position to manage repayments, attract investment, and regain access to international financing.
Dr. Weerasinghe also addressed the future of the International Monetary Fund programme. He said the current Extended Fund Facility (EFF) will conclude next year, but added that it is still too early to decide whether another IMF credit facility will be needed.
At the same time, he noted that confidence in debt sustainability has improved significantly. As a result, the country can already access funding opportunities from international financial markets.
The Governor also challenged a common belief about borrowing.
He argued that taking loans is not necessarily a problem if the money creates productive assets and supports economic growth. According to him, the real responsibility lies in using both domestic and foreign borrowings efficiently while preventing corruption, waste, and unnecessary interest costs.
His message was clear: borrowing itself is not the risk. Misusing borrowed funds is
Central Bank of Sri Lanka (CBSL)
Last modified: June 5, 2026
