Global Economists Call for SL to Pause Debt Repayments Post-Ditwah

A group of leading global economists, including Nobel laureate Joseph Eugene Stiglitz, has called for Sri Lanka’s debt repayments to be suspended as the country grapples with the aftermath of Cyclone Ditwah.

The appeal comes amid widespread devastation caused by the cyclone, which killed more than 600 people and destroyed hundreds of thousands of homes across the island. President Anura Kumara Dissanayake described the disaster as the “largest and most challenging natural disaster in our history.”

Sri Lanka’s national debt, estimated at around US$9 billion, was restructured in 2024 following a sovereign default in 2022. However, development advocates warned at the time that the restructured debt burden remained unsustainable. Prior to the cyclone, annual debt repayments were projected to consume about 25% of government revenue, a level considered high by both international and historical standards.

In a joint statement, the group of 120 experts urged a fresh round of debt restructuring to restore debt sustainability in light of the extensive environmental and economic damage caused by the disaster.

“Sri Lanka is now confronting a severe economic shock triggered by the recent cyclone, extensive flooding, and landslides, which has inflicted widespread damage on infrastructure, livelihoods, and key sectors of the economy,” the statement said. “This environmental emergency is likely to absorb—and potentially exceed—the extremely limited fiscal space created by the current debt restructuring package.”

The economists noted that Sri Lanka has already taken on additional external debt from the International Monetary Fund (IMF) and may require further borrowing to address disaster-related impacts. They called for the “immediate suspension of Sri Lanka’s external sovereign debt payments, and a new restructuring that restores debt sustainability under the new circumstances.”

Following the cyclone in November 2025, the Sri Lankan government requested a US$200 million emergency loan from the IMF under its Rapid Financing Instrument. Such loans are typically repayable within three to five years. Scientists from World Weather Attribution have said global warming likely intensified the flooding linked to Cyclone Ditwah.

A UK government spokesperson said Britain recognised the devastating impact of the cyclone on Sri Lanka and reaffirmed its support for recovery efforts. The UK has already provided £1 million in humanitarian aid through the Red Cross, UN agencies, and civil society organisations to deliver emergency relief and life-saving assistance.