Fitch Ratings has affirmed Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘CCC+’, citing continued challenges from high government debt and a heavy interest-revenue burden despite the completion of debt restructuring in 2024.
The agency noted that Sri Lanka’s economic outlook is supported by sustained reform efforts, which are driving a solid recovery, lowering inflation, strengthening fiscal performance, and improving external finances.
According to Fitch, significant progress has been achieved under the 48-month IMF programme, including the passage of the 2025 Budget in line with programme targets and the implementation of cost-reflective electricity pricing. Reforms are also underway in tax compliance, revenue administration, the Ceylon Electricity Board, and other state-owned enterprises.
Fitch added that foreign direct investment (FDI) remains a priority to boost medium-term growth, though progress is expected to be gradual.
