Fitch Ratings has confirmed Sri Lanka’s CCC+ sovereign rating saying external finances are stable, and growth is resuming despite US tariffs.
“We expect full-year growth at 4.4 percent, with 3.8 percent in 2026 and 3.6 percent in 2027,” the rating agency said.
“US tariffs will be a growth headwind, but the revised reciprocal tariff rate of 20 percent is now in line with peers, reducing risks to exports.
“We see low average inflation, but to rise gradually to 5 percent in 2027, in line with the CBSL’s inflation target.”
Sri Lanka’s macro-economists created a series of currency crises with its 5 percent inflation target, ousted two elected administrations and triggered a sovereign default using inflationary open market operations and buy-sell swaps to inject money, critics have said.
The resumption of open market operations led to a public outcry in the last quarter of 2024 and the current account slipped into deficit as the central bank was unable collect sufficient reserves.