Regardless of the governing administration, securing the necessary foreign funding to address the external resource gap is critical, with an estimated US $5018 billion required for international transactions by 2025.

To bridge this gap, the IMF has agreed to provide $663 million under an extended credit facility, along with an additional $700 million to bridge the 2025 budget deficit.

The World Bank (WB) and the Asian Development Bank (ADB) have pledged $400 million and $300 million, respectively. Furthermore, $3,655 million in debt relief is anticipated for next year’s budgt, crucial for covering public servant salaries, pensions, and subsidies.

Despite efforts to minimise budget deficits, a shortfall of $3,911 million is projected by 2027. To prepare the budget for that year, $629 million will be allocated, in addition to $600 million from the IMF, $300 million from the WB and $300 million from the ADB. However, an additional $1.5 billion will be needed, requiring access to the international market.

Given the global market conditions, Sri Lanka’s sovereign bonds can only be issued in 2027, provided foreign reserves reach $14 billion, a significant increase from the current $5.5 billion