Apr 16, 2014 (LBO) – Sri Lanka’s sovereign credit could be upgraded on a steadily narrowing budget deficit and a lower external debt burden, which were weaker than similarly rated countries, Fitch Ratings has said. Among Fitch rated Asia Pacific sovereigns, Mongolia had a ‘B+’ rating with a negative outlook, Vietnam ‘B+/positive’, Philippines and Indonesia ‘BBB-/stable’, Malaysia ‘A-/negative’, Japan ‘A+/negative’ and China and Taiwan ‘A+/stable’.
Korea and Macao were rated ‘AA-/stable’, New Zealand ‘AA/stable’ and Singapore and Australia ‘AAA/stable’.
Sri Lanka has been given a ‘BB-‘ sovereign rating three levels below the lowest investment grade rating of ‘BBB-‘ by Fitch with a stable outlook.
Compared to similar rated peers, public finances and external finances were listed as a ‘weakness’ and ‘macroeconomics’ and ‘structural issues’ neutral.
Budget deficits of other emerging nations rated by Fitch were around 3 percent of gross domestic product.
“The fiscal deficit (5.9 percent of GDP in 2013) and government debt burde