Sri Lanka’s sovereign debt restructuring is nearing the finish line, with only about 1.7 percent of external debt within the restructuring perimeter still to be finalised, according to the Global Sovereign Debt Roundtable’s (GSDR) 6th Co-Chairs Progress Report released on April 15.
The report, launched on the sidelines of the IMF/World Bank Spring Meetings in Washington DC, places Sri Lanka alongside Ghana, Zambia, Ethiopia and Suriname as cases where sovereign debt workouts have reached an advanced stage. Sri Lanka’s restructuring was conducted outside the G20 Common Framework.
Residual creditors and bilateral deals
According to the GSDR, most of Sri Lanka’s restructuring cases launched during 2021 and 2022 have now been largely completed. Only a small number of residual commercial creditors remain, while the signing of bilateral agreements with official creditors is “well advanced, though not yet fully finalized.” Authorities are continuing good-faith negotiations with the remaining commercial holdouts.
The 1.7 percent residual figure refers to Sri Lanka’s total external debt within the restructuring perimeter as of end-2023.
Key milestones cited
The report highlights several milestones in Sri Lanka’s recovery: the successful completion of the fourth IMF review in July 2025, emergency financing under the IMF’s Rapid Financing Instrument after Cyclone Ditwah in December 2025, and up to US$120 million in World Bank emergency support repurposed from ongoing projects to restore essential services and infrastructure.
The GSDR praised Sri Lanka’s progress as “an important step toward restoring debt sustainability,” while warning that debt vulnerabilities remain elevated globally, particularly in low-income countries amid continued economic uncertainty.
The report arrives as Sri Lanka’s delegation to the IMF Spring Meetings continues engagements in Washington, and just days after the IMF staff-level agreement on the fifth and sixth reviews unlocked a further US$700 million tranche.
