Sri Lanka’s economic crisis is far from over, as the nation’s public debt has now skyrocketed to a staggering USD 106 billion, according to Professor Wasantha Athukorala, Director of the Postgraduate Institute of Humanities and Social Sciences at the University of Peradeniya. Even more alarming, he warns, is the growing share of domestic debt—tightening its grip on the country’s fragile economy.
Speaking to the media, Professor Athukorala acknowledged that foreign remittances and tourism have brought in more income compared to previous years, offering a glimmer of hope. “We’re seeing signs of gradual economic recovery,” he said, “but we cannot ignore the terrifying undercurrents threatening that progress.”
One of the most disturbing trends, he pointed out, is the exponential increase in interest payments on debt. In 2020, the government allocated approximately Rs. 866 billion for debt interest payments. By 2023, that figure had nearly tripled to Rs. 2,456 billion. Projections show it climbing even higher—Rs. 2,690 billion in 2024 and Rs. 2,950 billion in 2025.
“That means we are now spending close to Rs. 3 trillion just to service debt interest. In comparison, only around Rs. 1.3 trillion has been allocated for critical economic investments,” he emphasized.
Economically, this imbalance raises urgent questions. “When you analyze the numbers, it’s hard to argue that we’re steering the economy in the right direction,” said Professor Athukorala.
The figures paint a stark picture: while debt continues to balloon and eat up national resources, essential investments in the country’s future remain underfunded. The warning is clear—without a radical shift in fiscal priorities, Sri Lanka may be heading straight into another economic storm.
