By The Pulseline News Desk
Sri Lankan government’s external debt has increased by US$ 345 million during the first six months of 2026, with bilateral and multilateral borrowing rising while commercial debt has declined, according to the latest official debt data.
Total government external debt stood at US$ 38.008 billion at the end of June 2026, compared with US$ 37.663 billion at the end of December 2025.
The increase has reportedly come amid a significant shift in the composition of the country’s external debt, with multilateral and bilateral loans recording growth during the first half of the year, while commercial debt fell.
Bilateral debt increases
Bilateral loans have reportedly increased by 1.1%, or US$ 119 million, during the first half of the year, rising to US$ 10.797 billion at the end of June from US$ 10.678 billion at the end of 2025.
China-led bilateral lending has accounted for the largest component of this category.
Of Sri Lanka’s bilateral debt, approximately 59% is owed to non-Paris Club countries, while around 41% is owed to Paris Club countries.
Multilateral debt records larger rise
Multilateral debt has recorded a stronger increase during the period, rising by 3.4%, or US$ 488 million, to US$ 14.802 billion from US$ 14.314 billion at the end of December.
The Asian Development Bank (ADB) and the World Bank have remained the principal multilateral creditors, together accounting for more than 78% of Sri Lanka’s total multilateral debt.
Multilateral loans represented the largest component of the government’s external debt at the end of June, accounting for approximately 38% of the total.
Commercial debt declines
Commercial debt has moved in the opposite direction, declining by 2.1%, or US$ 262 million, during the first six months of 2026.
The stock of commercial debt has fallen to US$ 12.409 billion at the end of June, from US$ 12.671 billion at the end of 2025.
Despite the decline, commercial borrowing has remained a significant component of the country’s external liabilities, accounting for around 34% of total government external debt.
Approximately 81% of commercial debt consists of International Sovereign Bonds (ISBs), with the remainder comprising foreign-currency term financing facilities.
Second quarter sees sharper increase
The debt data has also show a marked difference between the first and second quarters of the year.
Government external debt has recorded a US$ 540 million increase during the second quarter, following a nominal US$ 195 million decline during the first quarter.
As a result, the overall external debt position has increased by US$ 345 million over the first six months of 2026.
The latest figures put the composition of Sri Lanka’s government external debt at approximately 38% multilateral, 34% commercial and 28% bilateral.
Debt composition remains closely watched
The changing composition of external debt comes as Sri Lanka continues to manage its post-crisis debt position following the country’s 2022 sovereign default.
The latest figures, however, primarily show how the composition and outstanding stock of government external debt has changed during the first half of 2026.
With total external debt standing above US$ 38 billion, the figures remain an important indicator of the Government’s financing position as Sri Lanka continues its broader debt-management and economic recovery efforts.
The Treasury’s Second Quarter 2026 Quarterly Statistical Debt Bulletin forms part of the Government’s official quarterly debt reporting series.
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