S&P: Sri Lanka outlook stable

Standard & Poor's said it affirmed the B+ long-term foreign-currency and BB- local-currency sovereign credit ratings on the Democratic Socialist Republic of Sri Lanka. The B short-term foreign- and local-currency sovereign credit ratings were also affirmed.

The agency also affirmed the country's senior unsecured local-currency rating at BB- and the transfer and convertibility assessment at BB-.

The outlook on the ratings was revised to stable from negative.

The ratings on Sri Lanka reflect the medium-term growth prospects, with its open and diverse economy, and the terms of its foreign-currency debt, which imposes minimal stress on external liquidity, S&P said.

These factors are balanced against the high government debt and weak revenue mobilization, with the political and security concerns posed by the unresolved conflict with Tamil separatists, the agency said.

The stable outlook considers improved revenue generation after tax raises and fiscal administration reforms, according to S&P.

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