Aug 07, 2013 (LBO) – Sri Lanka’s credit rating can be upgraded if fiscal and monetary policy improves leading to greater stability and steady growth and more foreign direct investment and less debt comes for investment, a senior Fitch Ratings official said. Sri Lanka has a ‘BB-‘ speculative rating, three levels below investment grade with a stable outlook.
Andrew Colquhoun, head of Asia Pacific sovereign ratings at Fitch, said Sri Lanka has seen higher levels of economic growth and also investment in recent years than many similarly rated countries.
Fiscal, monetary and structural and other policy miss-steps that led to excessive demand including, high credit growth, inflation and external sector problems would be negative for the rating.
Effective macro-economic policy would be positive for the sovereign rating, he said.
Central Bank governor Nivard Cabraal said Sri Lanka wanted to get an investment grade rating (at least BBB-) by 2016 and said rating agencies did not take into account individual country differences sufficiently.
Fitch had placed Indonesia on investment grade in December 2011, Turkey in November 2012 and the Philippines in March 2013.
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