Sri Lanka has committed to completing its foreign debt restructuring by the end of December 2023, aiming to address its $46 billion external debt. After defaulting on debt in April 2022, the country has been working on rebuilding its finances with help from an IMF bailout. Deputy Minister Anil Jayantha Fernando confirmed that debt restructuring, which has been delayed for over two years, is critical for the country's economic recovery. The restructuring includes international sovereign bonds and bilateral debt, and Sri Lanka hopes to resolve these issues before finalizing its 2025 budget.

Sri Lanka’s recent political changes, including the election of President Anura Kumara Dissanayake, have affected the debt restructuring process. Initially critical of the terms, the new administration has accepted the previous government's agreement with private creditors, which includes a 27% loan haircut and a reduction in overdue interest payments. The IMF bailout in 2023, following austerity reforms like increased taxes and essential price hikes, remains a vital part of the nation’s efforts to regain financial stability. The restructuring is a key requirement for Sri Lanka to re-enter international financial markets.