S&P Global Ratings has affirmed its long- and short-term foreign and local currency sovereign credit ratings on Sri Lanka at 'CCC+/C'.
The agency cited strong revenue growth as a key factor supporting the decision, indicating that the country's fiscal position remains on a stabilizing trajectory despite the low credit standing.
The affirmation comes against a backdrop of improving macroeconomic indicators for the island nation.
The World Bank recently reclassified Sri Lanka as an upper-middle-income economy, a significant shift that reflects sustained progress in macroeconomic stabilization following the severe financial crisis that gripped the country in recent years.
This reclassification underscores the structural improvements in the economy, even as the sovereign rating remains in the speculative grade category.
For investors, the 'CCC+' rating implies a high degree of credit risk, but the stable outlook suggests that the immediate threat of default has receded.