A tiny fiscal misstep could cost Sri Lanka a massive $70 million, as the nation’s revenue targets fall agonizingly short of a crucial debt relief trigger.
Sri Lanka is at risk of losing USD 70 million in potential debt relief due to a critical fiscal planning oversight, according to an analysis by the interdisciplinary think tank Verité Research. The warning concerns the nation’s Governance-Linked Bond (GLB), which offers debt relief if the government meets specific revenue thresholds.
Verité Research highlighted that while the Government’s own revenue projections for 2026 and 2027 align with the latest International Monetary Fund (IMF) forecasts, they fall just short of the targets required to activate the GLB-linked debt relief. This marginal shortfall could prove extremely costly for the country’s economic recovery. For the year 2026, the Government has projected a revenue level of 15.2% of GDP, slightly below the GLB target of 15.3%. Similarly, the 2027 projection is 15.3% of GDP, just below the required 15.4%.
This seemingly minor discrepancy underscores a significant need for greater precision and more ambitious targets in the nation’s fiscal planning. Failing to adjust these projections could result in Sri Lanka missing out on a crucial financial benefit designed to support its path out of economic crisis. The situation highlights the intense pressure on the government to balance IMF program compliance with maximizing every available opportunity for debt restructuring and relief.
