Standard Chartered confident Sri Lanka will see ratings outlook upgrade

Debt-to-GDP expected to fall below 100% by 2027, ahead of IMF projections

- 

■Ratings outlook seen shifting from stable to positive on fiscal and debt gains External debt servicing in 2026 estimated at under $3 b, down from $ 3.5 b in 2025 with reserves expected to reach $ 7.5 b by year end

■Light rupee depreciation this year

STANDARD Chartered Bank Economist Saurav Anand said Sri Lanka's improving fiscal and debt indicators, recovery in consumption and the potential for an investment rebound, could support a change in the sovereign ratings outlook this year, even if the headline rating remains unchanged.

"Our view is that we will see a change in the rating outlook this year," Anand said, adding that the most likely shift would be from Stable to Positive.

S&P Global and Fitch have upgraded Sri Lanka's sovereign ratings to CCC+ with a Stable Outlook, citing the post-crisis recovery but continuing to highlight elevated debt levels and reliance on ongoing reforms, while Moody's retains a lower Caa1 rating with a Stable Outlook.

He said SriLanka's public debt position had strengthened materi ally since the start of the IMF program."Debt-to-GDP has come down from around 125%-126% of GDP in 2022 to closer to 103%-104% by 2025 once the final numbers are out," Anand said. "We are expecting that number to fall below 100% by 2027 Anand noted that the IMF had initially projected Sri Lanka's debt ratio to decline to 95% of GDP only by 2032, with earlier estimates pointing to 100% by 2030. The IMF has since upgraded its forecast and now expects 100% of GDP by end 2028," he said, adding that Standard Chartered expected Sri Lanka to outperform that timeline.