S&P Global Affirms Sri Lanka’s Sovereign Rating At ‘CCC+/C’ With Stable Outlook

COLOMBO (News 1st) - According to S&P Global Ratings, Sri Lanka’s long- and short-term foreign and local currency sovereign credit ratings have been affirmed at ‘CCC+/C’ with a stable outlook, reflecting what the ratings agency described as the country’s economic resilience despite recent external shocks.

S&P said Sri Lanka’s economic recovery has been supported by strong revenue growth and proactive government measures in response to challenges, including Cyclone Ditwah and disruptions in Middle East energy markets. 

According to the agency, real GDP growth reached 5.1% in the first quarter of 2026.

However, S&P noted that external pressures are increasing, with a higher import bill, currency depreciation, and rising energy costs contributing to inflationary pressures. 

The agency said inflation had risen to 6.8%, while gross official reserves declined to USD 6.45 billion in June.

S&P forecasts that Sri Lanka’s economic growth will moderate to 3.8% this year, while the current account is expected to shift to a deficit of 1.7% of GDP amid mounting external challenges.

Despite these pressures, the ratings agency said the stable outlook reflects expectations that continued fiscal reforms, improved economic performance, and sustained international financing support will help keep Sri Lanka’s recovery and debt consolidation efforts on track.