Apr 07, Colombo: Fitch Ratings has assigned Sri Lanka's forthcoming US dollar-denominated global bonds due 2019 an expected rating of 'BB-(EXP)'.
The expected rating is in line with Sri Lanka's current Long-Term Foreign Currency Issuer Default Rating (IDR) of 'BB-' with Stable Outlook. The sovereign's Long-Term Local Currency IDR is also 'BB-' with Stable Outlook, the rating agency announced.
The final rating is contingent on the receipt of final documentation conforming to information already received.
Relatively strong growth, a comparatively high level of basic human development as indicated by the UN's Human Development Index, and a solid payment record are key rating drivers for the rating ag3ency's decision.
Although the 2014 budget signals commitment to medium-term debt reduction and an ability to maintain a gradual fiscal consolidation trend, the high fiscal deficit, which was 5.9% of GDP in 2013, and government debt burden 78.3% of GDP in 2013 had driven the rating in the BB category,
Sustained improvement in the macroeconomic outlook that is consistent with healthy economic growth coupled with moderate and stable inflation and external equilibrium has contributed to the positive rating and stable outlook.
Read the full rating report here.