COLOMBO, July 31, 2025 —
President Anura Kumara Dissanayake on Wednesday firmly rejected speculation that Sri Lanka may face another economic collapse by 2028, assuring the public that the country is on a path of recovery, with a shift away from unsustainable borrowing and a renewed focus on strengthening foreign reserves.
In a televised address followed by remarks at a policy forum in Colombo, the President stated that Sri Lanka would not take on any new commercial loans in the foreseeable future and that the government’s financial strategy is centered on responsible fiscal discipline, exports, and domestic resource mobilization.
Rebuilding Trust After Crisis
“The era of borrowing for survival is over,” President Dissanayake declared. “We will not return to the cycle of dependency on commercial debt that pushed the country into crisis. Sri Lanka will not collapse in 2028 or any other year — we are building reserves, not liabilities.”
His comments come amid growing public discussion and international scrutiny over the country’s debt sustainability, especially after the 2022 default that plunged the nation into its worst financial crisis in decades.
Shifting Fiscal Priorities
President Dissanayake highlighted a series of reforms implemented over the past year, including enhanced tax collection, rationalized public spending, and a targeted subsidy framework to protect vulnerable groups without straining public finances.
He added that no new International Sovereign Bonds (ISBs) or other commercial debt instruments would be issued under his administration, a clear departure from past strategies that contributed to the island’s financial instability.
Building Resilience Through Reserves
Central to the government’s plan is the accumulation of foreign reserves, driven by a boost in tourism, remittances, and export diversification. According to the Central Bank of Sri Lanka, the country’s reserves reached $5.3 billion by mid-2025, up from just under $2 billion two years ago.
Finance Ministry officials say the target is to grow reserves to $10 billion by 2028, providing a critical buffer against external shocks.
A Message to International Partners
The President also addressed creditors and international partners, assuring them of Sri Lanka’s commitment to meeting restructured debt obligations while protecting long-term economic stability.
“We are not asking for bailouts; we are asking for space to rebuild our economy on our terms,” he said, emphasizing that future partnerships would prioritize productive investments and technology transfers over loans.
Outlook
While significant challenges remain — including inflation management, youth unemployment, and global market volatility — analysts view the government’s stance as a pivotal shift toward long-term sustainability.
“Sri Lanka is finally learning from its mistakes,” said economic analyst Dr. Praveen Fernando. “The decision to avoid commercial borrowing is bold, but necessary, if the country is to break the cycle of crisis.”
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