Sri Lanka corporate debt reaches 72% of GDP, IIF data show

Sri Lanka's non-financial corporate debt rose 21.1% in dollar terms to $86.5 billion in June 2026 from $71.4 billion a year earlier, close to twice the 11.2% increase in emerging market corporate debt to $42.8 trillion over the same period, according to IIF data.

The ratio climbed 6.5 percentage points from 65.5% in March 2024. The sharpest move came in the first quarter of 2026, when the dollar figure jumped 12.6% from $74.5 billion to $83.8 billion.

Corporate debt at 72% of GDP

Sri Lanka's ratio was the highest among South Asian economies tracked, above India's 48.4%, Bangladesh's 30.3% and Pakistan's 10.7%, and marginally above Thailand's 70.3%, the IIF data show. It remained below the emerging market average of 89.1% and Malaysia's 88.7%.

The corporate build-up contrasts with the household sector, where the debt ratio eased to 9.9% from 11.2% a year earlier, leaving corporate debt more than seven times household borrowing relative to output.

Tiftik said the corporate estimate combines cross-border bank lending data from the Bank for International Settlements, outstanding bond data from Bloomberg and domestic lending data from the IMF and World Bank. Domestic loans account for the majority of corporate debt and are estimated using the IMF Financial Soundness Indicators, supplemented where necessary by historical growth assumptions, he said.

Tiftik said a currency breakdown of Sri Lanka's non-financial corporate debt is not readily available because of limited underlying data. The share of the debt stock in foreign currency therefore cannot be gauged from the IIF data.

Globally, debt rose by more than $10 trillion in the first half of 2026 to $365.5 trillion, with non-financial corporate debt reaching a record $105.1 trillion, up 6.1% from a year earlier, according to the IIF. Across emerging markets excluding China, governments and non-financial corporates accounted for most of the $1.7 trillion rise in debt during the period, which lifted the total to a record $38 trillion.

Government debt data error

The IIF also confirmed that Sri Lanka's government debt figures for the quarters after end-2022 were carried forward in error. The database holds government debt at $76.8 billion in every quarter from end-2022 to June 2026, while the report's country table prints an identical 115.9% of GDP for both June 2025 and June 2026.

"The latest government debt figure for Sri Lanka in our database is for end-2022. The figures carried forward thereafter were the result of a data-entry error," Emre Tiftik, the IIF's Global Markets and Policy Director, said in comments to the Daily Mirror.

Tiftik said Sri Lanka has not been included in the IIF's aggregate emerging market government debt calculation since 2022. The IIF expects regular updates to resume in its next issue as more official data become available.

On the sovereign side, Tiftik said restructuring agreements covering around 94% of external debt within the restructuring perimeter are finalised, leaving roughly 6% still to be concluded. Completing the remaining steps as soon as possible will be important to restore and deepen international market access, he said.