Sri Lanka has had a tumultuous credit rating history especially over the past decade or so. In this month’s focus we looked at the current status of Sri Lanka’s structural change and how Sri Lanka might be ready to receive a credit rating upgrade in the near term. Sri Lanka has gone through a structural shift in its fiscal management and stronger than regular external accounts which places the country at a significantly better level in comparison to many other economies that are/were at a B- Credit rating (higher rating than SL’s current CCC+/Caa1 rating).
We also observe how Sri Lanka’s debt burden, despite being considerably higher than its B- peers, has improved from 2022 numbers, where public debt levels stood above 100% of GDP. At the same time, while Sri Lanka’s interest payments levels are much higher than most economies that have a B- rating, the data of the past 5 years suggest that Sri Lanka has been able to improve its numbers at a faster rate than IMF forecasts.
While the elevated debt burden and interest payment obligations remain key constraints, the focus looks at the pace of improvement and relative performance against similarly rated economies and the possibility for Sri Lanka to receive a credit rating upgrade.
Our clients would have already received a detailed report to their emails on this; alongside the numbers we associate with each of these varied scenarios. The full report has also been accessible on our Athena reports platform since the 28th of July 2026. If you still haven’t had a chance to read through it, click here! If you are yet to be a subscriber, please do get in touch with us for a trial subscription to our reports at clientconnect@frontiergroup.info.