Mahinda Rajapaksa

MP Rajapaksa misrepresents past reduction of debt burden


My government reduced the debt-to-GDP ratio from 90% at the end of 2005 to 69% at the end of 2014. | December 20, 2023


Partly True

Fact Check

In his statement, the MP claims that Sri Lanka’s debt-to-GDP ratio reduced from 90% at the end of 2005 to 69% by the end of 2014.

To check this claim, referred to the Annual Reports of the Central Bank of Sri Lanka (CBSL) and the Ministry of Finance.

The accounting of national debt involves (1) Central Government Debt (CD), which is limited to debt held by the government Treasury, and (2) Public Debt (PD), which, in addition to CD, includes the debt in the books of State-Owned Enterprises (SOEs). Globally, including by the IMF, the debt burden of a country is evaluated based on PD, not CD only, because it is PD that gives a fuller accounting of a nation’s debt obligations.

The PD-to-GDP ratio at the end of 2005 was 92.1% and was 76.5% at the end of 2014. This does not align with the MP’s figures. However, his figures align with the CD-to-GDP figures of 90.8% and 69.5% in 2005 and 2014, respectively (see Exhibit 1).

By citing only the part of the debt that is accounted for as CD, the MP (a) misrepresents the overall debt exposure in 2014, and (b) suggests a larger reduction in debt-to-GDP ratio (of 21.3 percentage points) from 2005 than the actual decrease of 15.6 percentage points in terms of PD.

The MP’s use of CD figures is further misleading because former President Mahinda Rajapaksa’s administration was found to manipulate and understate CD by transferring debt that was originally in the books of the central government into the books of SOEs. This accounting manoeuvre artificially reduced the reported CD without making any reduction in PD. For instance, in 2014, the loan balances for the Puttalam Coal Power Plant, Hambantota Port Development, and Mattala Rajapaksa International Airport, amounting to LKR 309 billion (or 3 % of the GDP in 2014), were removed from the books of CD and moved to the books of various SOEs (see Additional Note).

The MP’s figures on debt-to-GDP reduction are not only citing a partial accounting of total debt by using CD figures instead of PD figures, but he is also citing a CD figure that was manipulated during his presidency to report a lower figure in 2014. The actual reduction of debt-to-GDP in that time period was significantly less (less than three-fourths in percentage points) than what the MP had claimed. However, the reduction in PD-to-GDP by 15.6 percentage points does support perhaps the larger claim of the MP that there was a substantial reduction in debt-to-GDP during that period.

Therefore, we classify the MP’s statement as PARTLY TRUE.

Additional Note: For more details on this manipulation of debt reporting refer to Verité Research, ‘Navigating Sri Lanka’s Debt: Better reporting can help – a case study on China debt’, 2021, p.5.


Exhibit 1: Central Government Debt vs Public Debt

Source: Central Bank of Sri Lanka



Central Bank of Sri Lanka, Annual Reports, available at,

Ministry of Finance, Annual Report 2014, available at,

Verité Research, ‘Navigating Sri Lanka’s Debt: Better reporting can help – a case study on China debt’, February 2021, available at, https://www.Verité

International Monetary Fund, ‘IMF Country Report No. 23/116, Sri Lanka’, March 2023, available at,

Mahinda Rajapaksa Seeks Stability and Tax Cuts, NewsFirst, available at,

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