Sri Lanka’s economic landscape is marked by a significant challenge: its burgeoning national debt. In 2022, the country witnessed a concerning peak in its debt-to-GDP ratio, with central government debt exceeding 120% of GDP and public debt surpassing 128%. This alarming situation prompted the government to take decisive action in 2023. They suspended payments on select foreign debts and embarked on an International Monetary Fund (IMF) program specifically designed to achieve debt sustainability.
However, despite these efforts, the intended improvements haven’t materialized as swiftly as anticipated. Data from charts.lk reveals a troubling trend – during 2023, the central government debt actually increased by a substantial $16.6 billion, representing a concerning 21% growth. This underscores the ongoing complexities involved in managing Sri Lanka’s immense debt burden. While debt restructuring initiatives and international support are in place, their effectiveness in achieving long-term sustainability remains a question mark, requiring continued monitoring and potentially further efforts to address this critical challenge.