MP Ranawaka shows Sri Lanka borrowed more than it repaid in foreign loans

Fact Check

MP Ranawaka claimed on X (formerly Twitter) that Sri Lanka has borrowed more than it has repaid, citing USD 3 billion in new loans and USD 2 billion in repayments. FactCheck.lk understands his claim, as cited in his X thread, to refer to the period after the country’s April 2022 default on external debt (‘post-default’ period).

To check this claim, FactCheck.lk reviewed the Central Bank of Sri Lanka (CBSL) statistical tables on its website, the CBSL’s Annual Report for 2022, and the Department of External Resources’ website.

The USD 2 billion loan repayment figure cited by the MP aligns with the figure quoted by government officials, including State Minister of Finance Shehan Semasinghe and President’s Director General of Community Affairs Ranjith Keerthi Tennakoon. This figure reportedly covers repayments from April 2022 to February 2024. Latest publicly available CBSL data (from April 2022 to December 2023) documents USD 1.38 billion of repayments. With potential repayments in January and February 2024, the USD 2 billion figure is plausible.

FactCheck.lk understands the MP to be responding to the government’s USD 2 billion loan repayment claim by arguing that Sri Lanka has borrowed much more from multilaterals, than it has repaid.

On loans borrowed: The multilateral loans borrowed during the post-default period mostly align with the MP’s claim of USD 3 billion.

April to December 2022: In this period total multilateral and bilateral loans amounts to USD 1.81 billion. But most bilateral loans had paused due to the default with the exception of a credit line from India of approximately USD 1 billion. That means Sri Lanka received around USD 0.81 billion in mostly multilateral loans.

January to December 2023: In this period CBSL data shows loans of USD 2.33 billion from multilateral sources.

Therefore, total multilateral loans during the post-default period adds up to around USD 3 billion (0.81+2.33) as claimed by the MP.

The MP’s response to the government’s claim of repaying USD 2 billion is to point out that during the same post-default period, it borrowed much more (USD 3 billion) from multilaterals. The analysis shows the MP’s claim aligns with the data.

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

*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.