Since President Wickremesinghe assumed office in July 2022, Sri Lanka has repaid approximately $2 billion in debt.
Subscribe to our WhatsApp Channel Sri Lanka has been steadily recovering from the most severe economic recession in its post-independence era, achieving tangible and relative stability. However, this progress is being undermined by misleading social media campaigns that degrade the country's efforts and misinform the public about the actual state of recovery. Social Media Posts […]
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Sri Lanka has been steadily recovering from the most severe economic recession in its post-independence era, achieving tangible and relative stability. However, this progress is being undermined by misleading social media campaigns that degrade the country's efforts and misinform the public about the actual state of recovery.
Social Media Posts
Social media posts alleged that Sri Lanka has not made any loan payments since President Ranil Wickremesinghe assumed office in July 2022, with some asserting a debt payment halt for 10 months.
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Explanation
We contacted the Ministry of Finance and got their version regarding the claims made in these posts.
According to data from Sri Lanka’s Ministry of Finance and the Department of External Resources, the government has made substantial debt payments from mid-2022 to February 2024.
Detailed Findings:
Total Debt Payments: From July 21, 2022, to February 2024, the Government of Sri Lanka settled approximately US$ 1,909.7 million in foreign debt and interest payments.
This includes:
US$ 1,338.8 million in multilateral loans and interest.
US$ 571.0 million in bilateral loan repayments and interest.
Breakdown of Payments:
Multilateral Loans:
Asian Development Bank: US$ 760.1 million
Asian Infrastructure Investment Bank: US$ 7.0 million
European Investment Bank: US$ 22.3 million
International Fund for Agricultural Development: US$ 17.9 million
International Monetary Fund (EFF 23-26 program): US$ 9.8 million
Nordic Development Fund: US$ 1.7 million
OPEC Fund for International Development: US$ 29.9 million
World Bank: US$ 489.9 million
Support from International Financial Institutions:
Due to Sri Lanka’s commendable track record in debt repayment, institutions such as the Asian Development Bank, International Monetary Fund, and World Bank have extended further financial support to the country.
Bilateral Loan Negotiations:
Preliminary agreements with members of the Paris Club, involving US$450.7 million in interest payments, were set to be settled by the end of February 2024.
Bilateral loan transactions have been conducted with various countries and financial institutions, including Japan, Canada, China, France, Germany, India, South Korea, Kuwait, Pakistan, Russia, Spain, and the United States.
Repayment of Bangladeshi Loan- 7 Months Ago
200 million USD-worthy loan repayment also became a popular topic in SL media. In 2023, September (7 months ago now), the final installments of Bangladeshi debt were paid off. Such reports can be reached here and here.
Impact on Foreign Reserves:
After repaying multilateral, bilateral, and local dollar loans, Sri Lanka's foreign cash reserves have increased to over US$ 4.9 billion.
Continuous Loan Payments
A spokesman of the Finance Ministry confirmed to us that Sri Lanka is continuously repaying loans belonging to certain categories mentioned above. Monthly payment details for the last ten months will be published here soon.
Business Loan Restructuring:
The government is actively engaged in restructuring business loans and interest acquired at high interest rates. Payment of these funds will be deferred until debt restructuring negotiations are finalized.
A descriptive article about loan repayments, published by PMD, can be reached here. Archived
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Conclusion:
The claims circulating on social media about Sri Lanka halting debt payments since July 2022 are inaccurate. The Ministry of Finance’s data confirms that significant debt repayments have been made, totaling nearly US$ 2 billion from mid-2022 to early 2024. The government continues to manage its financial obligations despite economic challenges.
Title:Since President Wickremesinghe assumed office in July 2022, Sri Lanka has repaid approximately $2 billion in debt.
Fact Check By: Fact Crescendo TeamResult: False
