Update, September 2: The Deputy Finance Minister has rejected reports that government debt rose by more than Rs. 190 billion. Jump to the update

Later on September 2: The currency question is settled — the same stock fell 4.2 per cent in dollars and rose 2.3 per cent in rupees, and the minister puts the ratio at 88.8 per cent of GDP. Jump to the figures

Update, September 3: Over the full half-year, bilateral and multilateral debt rose while commercial debt fell — all of the increase came from official creditors. Jump to the half-year figures

Sri Lanka’s total public debt stood at US$97.952 billion, or Rs. 32.977 trillion, as of 30 June, according to the latest report from the Public Debt Management Office of the Ministry of Finance.

Central government debt accounts for almost all of it: Rs. 31.999 trillion, or US$95.047 billion, Ada Derana reported. The balance is made up of US$2.885 billion in state-owned enterprise debt carrying government guarantees, and US$20 million owed by provincial councils and provincial institutions.

Domestic debt is the larger half

Central government domestic debt reached US$57.039 billion, or Rs. 19.203 trillion, at the end of June.

Treasury bonds account for the bulk of that — US$47.732 billion, or Rs. 16.069 trillion — with outstanding Treasury bills at US$7.045 billion, or Rs. 2.372 trillion.

Foreign debt rose over the quarter

Central government foreign debt stood at US$38.008 billion at the end of June, up from US$37.468 billion at the end of the first quarter — an increase of US$540 million over three months.

It breaks down into three roughly comparable blocks:

Who Sri Lanka owes

Among bilateral creditors, China remains the largest at US$5.0067 billion, followed by Japan at US$2.2727 billion and India at US$853.9 million.

Among multilateral lenders, the Asian Development Bank holds the largest claim at US$6.8851 billion, ahead of the World Bank at US$4.6662 billion and the International Monetary Fund at US$2.6152 billion.

Of the US$12.4091 billion in external commercial debt, US$10.0071 billion sits in International Sovereign Bonds — the instruments restructured in 2024. A further US$2.402 billion is held under China-related Asian Development Bank term loan facilities.

What the report does not settle

Ada Derana’s account of the report does not give a debt-to-GDP ratio, a comparison with the same point in 2025, or the maturity profile of the domestic stock — the figures that would show whether the increase in foreign debt reflects new borrowing, exchange-rate movement or disbursements under existing facilities.

No other verified newsroom had published the quarterly figures at the time of writing, so the numbers above rest on a single report of the PDMO document. Daily FT and EconomyNext have since published the same bulletin with the quarter-on-quarter comparisons and the conversion rates — see the September 2 update, which answers most of this section.

Context

The composition reflects the settlement reached after default. The government has said the Official Creditor Committee process is nearing completion, and the ISB exchange completed in 2024 converted the bulk of commercial claims into new instruments — which is why a single line, International Sovereign Bonds, still carries more than US$10 billion of the total.

The reading also arrives in a month when inflation breached the Central Bank’s upper target band for a second time, and as the government seeks new concessional lending, including a US$200 million World Bank facility for tourism.

Update, September 2: the Deputy Finance Minister rejects a Rs. 190 billion increase claim

Deputy Minister of Finance and Planning Dr. Anil Jayantha Fernando has categorically rejected reports that government debt has risen by more than Rs. 190 billion, Ada Derana reported.

He said recent media reports citing information released by the Central Bank of Sri Lanka had carried the claim, but had not explained the basis for the alleged increase, and that some of the figures quoted were incorrect. It was unfortunate, he said, that claims about the country’s debt were being made without reference to verified official figures.

Fernando said official debt figures are published quarterly through the Debt Bulletin — the PDMO document the figures above come from — which sets out domestic and foreign borrowings, including foreign debt broken down by individual country and by multilateral, bilateral and commercial source. Official records and verified data should be consulted before claims about government debt are made or reported, he said, and on the official figures debt has not increased in the manner claimed.

What the denial does not settle

Neither the Deputy Minister, as reported, nor Ada Derana names the outlet that published the Rs. 190 billion figure, the period it covers, or the Central Bank release it was drawn from. Without those, the claim cannot be checked against the bulletin he points to. No verified newsroom had published the disputed report itself at the time of writing.

The denial also does not say which currency it refers to — and on this bulletin that is the whole question.

He has made this argument before, and set out the currency point himself

This is the second time this year Fernando has answered a debt figure this way, and his earlier answer explains what is probably at stake.

In June he told Parliament that central government debt stood at about US$98.96 billion at end-March and that total public debt — including provincial councils, local government and state-owned enterprises — was about US$102.2 billion, rejecting what he called fake data then too. He argued the figures had to be read in dollars for international comparison, and dealt with the rupee objection directly:

“When debt is obtained in dollars, the liability remains in dollars. When debt is obtained in rupees, it remains in rupees,” he said. A rupee depreciation, he argued, only inflates the local-currency value of foreign borrowings without creating new dollar obligations: “That does not mean the dollar debt has increased. The additional amount reflected in rupees is an exchange rate loss, not new debt.”

The two quarters, side by side

Set his June figure against this bulletin and the direction depends entirely on the unit.

His end-March total public debt of about US$102.2 billion against the PDMO’s end-June US$97.952 billion is a fall of roughly US$4.2 billion, about 4 per cent, over the quarter — which supports his position as stated in dollars.

In rupees the arithmetic runs the other way. This bulletin converts US$97.952 billion into Rs. 32.977 trillion, an implied rate of about Rs. 336.7 to the dollar; the rupee was trading around 336–337 by mid-June after weakening through the quarter, having been meaningfully stronger at the end of March. A weaker rupee raises the local-currency value of nearly US$38 billion of external debt without a dollar being borrowed — the exchange-rate loss he described in June.

So a debt stock that shrank in dollars can have grown in rupees over the same three months, from the same tables. Neither Ada Derana’s account of the disputed reports nor its account of the rejection states which basis either side is using, so the two may not be measuring the same thing. That was also the shape of the exchange in June, when Opposition MP Ravi Karunanayake intervened to note that data submitted to the Committee on Public Finance put total debt at Rs. 34 trillion — a rupee figure — and asked why parliamentary and committee numbers differed.

Ada Derana did not report any response from the Central Bank, or from whichever outlet published the Rs. 190 billion figure.

Update, September 2: the currency question is answered

Two further reports have settled the point left open above — the same debt stock fell in dollars and rose in rupees over the quarter, and the gap is almost entirely exchange-rate movement.

Daily FT published a full reading of the PDMO’s second-quarter Statistical Debt Bulletin, giving both currencies side by side for the first time. Gross public debt rose by Rs. 744 billion, or 2.3 per cent, from Rs. 32.23 trillion at end-March to Rs. 32.98 trillion at end-June. Over exactly the same three months, its dollar value fell by US$4.32 billion, or 4.2 per cent, from US$102.27 billion to US$97.95 billion.

The reconciliation is the conversion rate, which the PDMO applies at each quarter-end. Daily FT reports the indicative rate used for end-June as Rs. 336.6623 per dollar, against Rs. 315.1909 at end-March — a rupee about 6.8 per cent weaker across the quarter. That confirms the estimate made above: this article inferred a rate of “about Rs. 336.7” from the bulletin’s own conversion, before the figure was published.

So both sides of the argument reported on September 1 were describing the same tables. Neither was wrong about the direction; they were quoting different units.

The first quarter ran the other way

Daily FT also supplies the missing earlier quarter. Gross public debt was Rs. 32.20 trillion, or US$103.86 billion, at end-2025, and rose only Rs. 38 billion in the first quarter to Rs. 32.23 trillion — while falling to US$102.27 billion in dollars. The rupee increase in 2Q is therefore roughly twenty times the 1Q increase, which is consistent with the currency, not new borrowing, doing the work.

Which line the minister is quoting

Deputy Finance Minister Anil Jayantha put the ratio at 88.8 per cent of GDP as of end-June 2026, down from 95 per cent on 31 December 2025, in a video statement issued by the Finance Ministry, EconomyNext reported. He said total government debt fell to US$95 billion by end-June from US$100.4 billion at end-2025, while rising in rupee terms to Rs. 32 trillion from Rs. 31.2 trillion.

Those figures are not the headline of this article. US$95 billion and Rs. 32 trillion are the PDMO’s central government debt line — Daily FT gives central government debt as US$95.05 billion and Rs. 32 trillion at end-June — not gross public debt of US$97.95 billion and Rs. 32.98 trillion, which additionally counts guaranteed state-enterprise and provincial borrowing. The minister’s series is the narrower one.

That distinction is not incidental. A fact-check published on August 17 found that the Central Bank Governor’s “105 per cent to 95 per cent of GDP” claim also tracked central government debt rather than the broader public debt measure used in debt sustainability analysis and in Sri Lanka’s IMF programme — under which the ratio stayed above 100 per cent throughout. The 95 per cent end-2025 figure the Deputy Minister uses as his starting point is that same narrower measure, so the 88.8 per cent is most likely on the same basis. Neither EconomyNext nor the Finance Ministry statement, as reported, says which measure the ratio uses, and no outlet has published a gross-public-debt-to-GDP ratio for end-June.

Central government debt, both ways

Daily FT’s breakdown shows the same split running through every component:

The US$540 million external increase reported above is confirmed exactly. The rupee figure shows why it matters domestically: the same borrowing costs Rs. 986 billion more to carry at end-June than at end-March.

Within the domestic stock, rupee-denominated obligations fell Rs. 227 billion to Rs. 18.46 trillion while foreign-currency-denominated domestic debt rose Rs. 47 billion to Rs. 741 billion. The securities portfolio shifted from short to long: Treasury bills fell Rs. 480 billion to Rs. 2.37 trillion while Treasury bonds rose Rs. 254 billion to Rs. 16.07 trillion.

Government-guaranteed state-enterprise debt fell US$394 million, or 12 per cent, to US$2.89 billion.

Movements among creditors

Daily FT gives the quarter-on-quarter creditor moves the September 1 report did not:

Multilateral, commercial and bilateral debt accounted for 38, 34 and 28 per cent of external government debt respectively at end-June.

A correction to the composition above

Daily FT identifies the US$2.40 billion of China-related term loans as China Development Bank facilities. The account above, following Ada Derana, described them as “China-related Asian Development Bank term loan facilities” — the Asian Development Bank is a separate multilateral creditor, listed at US$6.89 billion. The China Development Bank reading is the correct one.

Still open

Daily FT reports that Sri Lanka has resumed regular debt servicing with creditors that concluded restructuring agreements, but that negotiations were still under way with creditors from 13 nations as of end-June. It does not name them.

No outlet has yet published a debt-to-GDP ratio on the broader public debt measure, the GDP denominator used for the 88.8 per cent, or a maturity profile for the domestic stock. The Rs. 190 billion figure the Deputy Minister rejected remains unattributed to any named outlet or period, so it still cannot be checked against the bulletin — although the arithmetic above makes clear that a rupee-denominated increase of that order is entirely ordinary in a quarter when the currency moved 6.8 per cent.

Update, September 3: over the full half-year, official lending rose and commercial debt fell

A further reading of the same Treasury data sets the quarterly movements above against the full six months, and the direction differs by creditor type, EconomyNext reported.

Measured from end-December 2025 to end-June 2026:

Total government external debt therefore rose US$345 million across the half-year, to US$38,008 million from US$37,663 million at end-2025 — a smaller net increase than the US$540 million recorded in the second quarter alone, because the first quarter saw a nominal decrease of US$195 million.

That composition shift is the substantive point the quarterly figures obscure. Sri Lanka’s external borrowing grew over the half-year entirely through official creditors — the multilateral institutions and bilateral partners lending on concessional or near-concessional terms — while the market-priced commercial stock contracted. It is the pattern a country would expect in the year after a sovereign bond restructuring.

The composition, in shares

EconomyNext also gives the internal breakdown of each block, which the earlier reports did not:

The non-Paris Club majority is worth noting against the item left open above: Daily FT reported that negotiations were still under way with creditors from 13 nations at end-June. Non-Paris Club claims — the group that includes China, Sri Lanka’s largest single bilateral creditor at US$5.01 billion — are the ones without a standing multilateral forum for coordinated treatment.

EconomyNext does not name the 13 nations either, or say how the outstanding negotiations divide between the Paris Club and non-Paris Club groups.

Sources