IMF flags Sri Lanka macro-bond risks

Says higher payments from one-time adjustment after 2028 would continue even if growth slows, Extra debt service of $150-270 m triggered if GDP tops $ 94-107 b threshold, IMF notes political risks and complexity though payments capped at $ 250 m

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SRI Lanka could face additional debt service payments of between $150 million and $ 270 million a year from 2028 if its economy grows faster than projected, according to the IMF. Payments would continue until 2038 and are capped at around $ 250 million annually.

"In the case of Sri Lanka, the one-time adjustment nature of the macro-linked bonds presents risks to Sri Lanka as higher payments after 2028, once triggered, would persist even if economic performance were to deteriorate thereafter," the IMF said in September 2025 working paper titled 'Sri Lanka's Sovereign Debt Restructuring: Lessons from Complex Processes'.

The extra payments depend on GDP outcomes between 2025 and 2027.

"Scenarios 1, 2, and 3 are triggered if dollar GDP in 2025-27 exceeds $ 107 billion, $ 99 billion and $ 94 billion, and 2024-27 cumulative real growth exceeds 11.5%," the report explained.

Once these thresholds are met, higher payments become permanent for a decade regardless of what happens to growth later.