Sri Lanka Seeks $2b in Foreign Loans as IMF Bailout Nears End

Sri Lanka – (Special Correspondent/Web Desk) – Sri Lanka seeks $2b in foreign loans next year as it wraps up its four-year International Monetary Fund (IMF) bailout programme. President Anura Kumara Dissanayake shared the plan on Thursday while presenting the 2027 budget in parliament.

The exact figure is $2.08 billion. The money could help fund the budget.

Dissanayake said the government expects to finish the 17th IMF programme successfully. The bailout ends in March.

He said he has not yet decided on a new deal with the IMF. A committee has been set up to study the matter.

Sri Lanka got the $2.9 billion loan in March 2023. The country had defaulted on its $46 billion foreign debt in April 2022 after a deep economic crisis.

Foreign debt payments will fall to $2.98 billion in 2027. This year the figure is $3.59 billion, and last year it was $3.70 billion. “We have the stability required for this debt servicing,” the president said.

State revenue is forecast to slip slightly to 15.8 percent of GDP. It was 16.6 percent in 2026 and 16.7 percent last year.

The budget deficit is expected to widen a little to 4.5 percent of GDP. It stood at 3.7 percent this year and 2.3 percent last year.

The government has also raised the income tax threshold a little and widened the tax bands. Middle-income earners will see a small cut in tax rates. The top rate stays at 36 percent.

Dissanayake hopes to keep growth at 5.0 percent in 2027, the same as in 2025. Growth slowed to 4.2 percent in the second quarter of this year because of the Middle East war.

The IMF expects growth of 3.1 percent in 2026 due to higher global energy costs. Last month, it called the economy “remarkably resilient” after 11 straight quarters of growth.

The IMF also warned of downside risks. These include the Middle East war, global trade policy and El Nino.