Colombo, June 6, 2025 — Sri Lanka has spent a staggering Rs. 1.5 trillion on debt servicing in the first four months of 2025, with over 20% of the annual borrowing limit already utilized, Treasury officials revealed before the Committee of Public Finance (COPF).
Of the total, Rs. 796 billion was spent on interest payments—amounting to 27% of the full-year allocation—while Rs. 352 billion went towards principal repayments, representing 22% of the annual target. A substantial Rs. 705 billion of the interest payments was for domestic debt, underscoring the weight of local borrowing in the country’s debt structure.
As of end-April, the government had drawn Rs. 654 billion from domestic sources and Rs. 128 billion from foreign lenders, bringing the total borrowing to Rs. 782 billion, or 20.5% of the Rs. 3,800 billion borrowing ceiling set for 2025.
During the period, Rs. 107 billion in Treasury bills were retired, while Rs. 760 billion in Treasury bonds were issued on a net basis. Meanwhile, Sri Lanka’s domestic debt stock stood at Rs. 19.3 trillion by the end of April, and foreign debt stock was recorded at Rs. 11.2 trillion as of March.
Treasury guarantees also expanded, totaling Rs. 1,515 billion by April. Of this, Rs. 910 billion were issued for foreign-related commitments.
In another key development, officials disclosed a downward revision of the country’s GDP estimate for 2025. Originally projected at Rs. 33 trillion in the 2025 budget, the GDP forecast has now been reduced to Rs. 32 trillion in rupee terms. This recalibration is expected to affect both revenue collection and public expenditure, potentially reducing overall fiscal space by Rs. 150 billion.