Revenue gains drove Fitch upgrade: Deputy Minister

Friday, 25 September 2026 00:23 - - {{hitsCtrl.values.hits}}

Finance and Planning Deputy Minister Dr. Anil Jayantha Fernando has attributed Fitch Ratings’ upgrade of Sri Lanka to economic gains made over the past two years, pointing chiefly to stronger revenue collection and a primary surplus well above target.

Fitch on 22 September upgraded Sri Lanka’s Long-Term Issuer Default Ratings (IDRs) to ‘B-’ from ‘CCC+,’ with a Stable Outlook. IDRs measure a borrower’s relative vulnerability to defaulting on its debt.

In a statement issued yesterday, Dr. Fernando said, citing Fitch’s own assessment, improved revenue mobilisation was central to the upgrade. The Government collected revenue equal to 16.7% of GDP in 2025, exceeding the International Monetary Fund’s (IMF) target of 15.3%, he said.

Higher revenue also enabled a primary surplus of 5.4% of GDP in 2025, against a target of 2.3%. A primary surplus means revenue exceeds spending before interest payments. Dr. Fernando said the resulting fall in the Government’s borrowing needs and the improved capacity to repay existing debt were the main reasons for the upgrade.

He added that the economy’s resilience to shocks had also counted in its favour, with revenue collection holding up despite Cyclone Ditwah and the war in the Middle East.

The strength of the external sector, which is critical to debt repayment, was also taken into account, according to Dr. Fernando. He pointed to the country’s ability to build foreign reserves through export earnings, tourism receipts, and workers’ remittances, despite external pressures such as the Middle East crisis.