Govt. taps less than half of Rs. 4 t borrowing limit in 2025

Saturday, 4 July 2026 01:16 - - {{hitsCtrl.values.hits}}

Actual borrowing amounts to Rs. 1.96 t against Rs. 4 t statutory ceiling

Treasury raises Rs. 2.4 t through domestic Bond market as financing shifts inward

Foreign loan commitments reach $ 1.23 b, while disbursements total $ 1.78 b

The Government utilised less than half of its authorised borrowing limit in 2025, supported by existing cash buffers and improved fiscal conditions, according to the Finance, Planning and Economic Development Ministry’s 2025 Annual Report.

The report said actual Government borrowing during the year amounted to Rs. 1.96 trillion, well below the Rs. 4 trillion borrowing ceiling approved under the Appropriation Act, No. 3 of 2025, supporting the country’s debt reduction objectives.

In line with the Public Debt Management Act, No. 33 of 2024, the Government formulated its Annual Borrowing Plan for 2025 based on the Medium-Term Debt Management Strategy (MTDS) 2025-2029. The plan envisaged raising Rs. 700 billion from external sources and Rs. 3.1 trillion from domestic sources, excluding Treasury Bill rollovers, to finance the Government’s gross financing requirement within the approved borrowing limit.

The report said the Government’s financing strategy focused on increasing reliance on domestic financing while reducing refinancing, interest rate, and currency risks within the public debt portfolio.

Domestic financing remained the primary source of funding during the year. The Government raised Rs. 2.4 trillion through Treasury Bond issuances in the domestic market and mobilised a further $ 50 million, equivalent to around Rs. 15 billion, through the issuance of Domestic Dollar Bonds.

The report noted that Rs. 475 billion was secured through external financing sources.

On the external financing front, Sri Lanka entered into 14 foreign loan agreements with development partners in 2025, securing total commitments of $ 1.23 billion.

The Asian Development Bank (ADB) accounted for the largest share of commitments at $ 790 million, followed by the International Monetary Fund (IMF) with $ 206.1 million.

Budget support dominated new commitments, amounting to $ 706.1 million or 58% of the total financing secured during the year.

Meanwhile, total foreign loan disbursements received between January and December 2025 amounted to $ 1.78 billion. The IMF accounted for around 50% of total disbursements, followed by the ADB with 29% and the World Bank with 11%.

The report further showed that nearly 71% of total foreign loan disbursements were utilised for Budget support, underscoring the continued role of development financing in supporting fiscal operations and economic recovery. Humanitarian assistance accounted for 4.6% of disbursements, while tourism projects and roads and bridges received 4% and 3%, respectively.