Sri Lanka Finalizes Debt Restructuring Agreements with Paris Club and Chinese Exim Bank

In a landmark announcement, President Ranil Wickremesinghe revealed that Sri Lanka has successfully finalized debt restructuring agreements with its official creditors, marking a significant milestone in the nation’s economic recovery efforts. These agreements were finalized with the Paris Club in Paris and the Chinese Exim Bank in Beijing, signaling a new chapter for the country.

In his special statement, President Wickremesinghe highlighted that the debt restructuring agreements would defer all bilateral loan payments to foreign countries until 2028. Moreover, Sri Lanka has been granted until 2043 to repay these loans on concessional terms. This development is expected to provide substantial relief to the nation’s financial burden.

The President emphasized the profound impact of this agreement on Sri Lanka’s fiscal health. In 2022, the country allocated a staggering 9.2% of its GDP to foreign debt payments. However, with the successful restructuring, this percentage is projected to decrease to less than 4.5% between 2027 and 2032, reflecting a significant improvement in the nation’s fiscal situation.

President Wickremesinghe also recounted the difficult period following Sri Lanka’s official declaration of its inability to repay loans, which led to the suspension of all transactions and foreign-funded development projects. He stressed that the successful debt restructuring paves the way for the resumption of these crucial projects and transactions, fostering renewed economic activity and development.

The President underscored that the agreements with bilateral creditors bolster international trust in Sri Lanka. He noted that the global community, which had previously rejected the country’s Letters of Credit, now offers assurances regarding Sri Lanka’s credibility. This restored confidence is expected to attract more international investments and support.

President Wickremesinghe announced that the Prime Minister would present these agreements to Parliament on July 2nd, urging all patriotic Members of Parliament to ratify them. He expressed his gratitude to all parties involved, including ministers, officials, and the majority of the people who patiently supported the country through challenging times.

In his statement, President Wickremesinghe also addressed those attempting to disrupt the nation’s progress, warning that they would eventually face shame for betraying their country. He expressed optimism that the nation is on the right path to recovery and urged everyone to support these crucial steps forward.

This announcement marks a significant turning point for Sri Lanka, offering hope and a clearer path to economic stability and growth.