Sri Lanka Among Countries Closing Out Complex Debt Restructurings

COLOMBO (News 1st) Sri Lanka’s debt restructuring process is nearing completion, with significant progress recorded across negotiations and implementation, according to the latest 6th Co-Chairs Progress Report released by the Global Sovereign Debt Roundtable (GSDR) on April 15.

The report states that most sovereign debt restructuring cases launched during 2021 and 2022 have now been largely completed, including Sri Lanka’s, which was carried out outside the G20 Common Framework. Sri Lanka’s restructuring now involves only a small number of residual commercial creditors, while the signing of bilateral agreements with official creditors is well advanced, though not yet fully finalized.

According to the GSDR, Sri Lanka successfully completed the fourth review of its IMF-supported program in July 2025. In December 2025, following a severe cyclone, the country also received emergency financing under the IMF’s Rapid Financing Instrument. In parallel, the World Bank provided up to US$120 million in emergency support by repurposing funds from ongoing projects to assist recovery efforts and restore essential services and infrastructure.

The report notes that Sri Lankan authorities continue to engage in good-faith negotiations with the remaining commercial creditors. Residual debt yet to be restructured is estimated at about 1.7 percent of Sri Lanka’s total external debt within the restructuring perimeter as of end-2023, indicating that the bulk of the process has already been completed.

Sri Lanka is highlighted alongside countries such as Ghana, Zambia, Ethiopia and Suriname as cases where restructuring efforts have reached an advanced stage. While acknowledging that debt vulnerabilities remain elevated globally,particularly in low-income countries amid continued economic uncertainty, the GSDR moted Sri Lanka’s progress as an important step toward restoring debt sustainability.