Mar 13, 2013 (LBO) – Sri Lanka is facing higher external pressure due to lack on a program with the International Monetary Fund and also slower growth, Moody’s Investors Service, a rating agency said. “Although the government will likely continue to make gradual progress in reducing its deficit, the debt burden will remain high,” Moody’s said.
“The absence of a new funding program is credit negative from the perspectives
of external payments and growth.”
IMF ended a 2.6 billion US dollar loan program last year.
Sri Lanka dropped plans for another IMF program last month after the lender declined to disburse money to the Treasury rather than the Central Bank, while also saying there was timing issues related to any agreed reforms.
Moody’s has given Sri Lanka a ‘B1’ speculative rating with a Positive outlook.
Moody’s has just released a report ‘Sri Lanka — The Post-IMF Backdrop: Downward Growth Pressures and Elevated External Pressures”, that looks at macroeconomic stability, external payments position and controlling budget deficit which affect the credit outlook.
Moody’s said there has been progress since a civil war ended in 2009.
“However, given the challengi