Political battles and economic war

On Thursday, 20th August, 2026, political battles have overshadowed the ongoing economic struggle in Sri Lanka. The JVP-NPP government is hastily working to amend the Constitution in order to raise the mandatory retirement ages of judges at the Supreme Court and Court of Appeal. As its approval rating declines, the government is reportedly focusing on consolidating its power through political and judicial means instead of prioritizing economic development and delivering economic relief to the public.

Former President Ranil Wickremesinghe has expressed concerns about Sri Lanka's prospects of resuming foreign debt repayment by 2028. Dr. Anil Jayantha Fernando, Deputy Minister of Finance and Planning, informed Parliament that the country managed to build its foreign reserves more rapidly than expected, while simultaneously supporting economic activities and repaying debt. The government has already repaid USD 2.6 billion in debt while maintaining foreign reserves around USD 6.6 billion.

Wickremesinghe emphasized that foreign reserves would need to surpass USD 14 billion in 2028 for the country to achieve debt sustainability. However, he questioned how the government intends to reach this challenging target. In the past, some JVP/NPP leaders criticized previous governments for failing to fully repay the country's foreign debt. The JVP/NPP bigwigs had promised that foreign investors would flock to the country under a JVP-led administration, but this has not materialized.

The ongoing IMF program aims to help stabilize the economy, and it is up to Sri Lanka to work towards economic growth. Former President Wickremesinghe claimed that his SLPP-UNP government revitalized a struggling economy, lowered inflation, stabilized the rupee, and increased foreign currency reserves to USD 6 billion. He also introduced key legislation such as the Central Bank Act, Public Financial Management Act, and Public Debt Management Act to ensure economic stability.