Sri Lanka will have to address US$ 400mn resources mgt. gap in 2026: COPF

Sri Lanka will have to find ways and means to address the US$ 400 million resources management gap in 2026, it was revealed by the Committee on Public Finance (COPF), Parliament sources said yesterday.

Sri Lanka’s total external debt servicing requirement for 2026 is projected at US$ 2,504 million. Expected foreign inflows for that year amount to US$ 2,100 million, including US$ 858 million in project loans, US$ 150 million in World Bank budget support, US$ 380 million from the Asian Development Bank (ADB), and US$ 800 million from the International Monetary Fund (IMF).

“Accordingly, a resource management gap exceeding US$ 400 million remains to be addressed for debt servicing in 2026,” an official statement from Parliament media office said.

COPF has observed that Sri Lanka’s total domestic debt stock amounts to Rs. 31 trillion, comprising Rs. 15.6 trillion in Treasury bills and Rs. 15.4 trillion in Treasury bonds. The average cost of this total debt is reported at 8.73 percent.

The Treasury maintains a significant cash buffer to meet government’s daily expenditure requirements, with approximately Rs. 750 billion available by the end of 2025. Due to payments made in December, the cash buffer had declined to this level, leading to increased issuance of Treasury bills from late December to mid-January, which in turn raised interest costs during that period. 

However, the situation has now stabilised, officials stressed. 

It was also noted that as the return earned from investing the cash buffer is approximately 2–3 percent lower than government’s annual interest cost, maintaining such reserves entails an opportunity cost. 

(AS & YP)