Fitch upgrades Sri Lanka to B- with a stable outlook

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Fitch upgrades Sri Lanka to B- with a stable outlook

22 September 2026

On 22 September, Fitch Ratings raised Sri Lanka's Long-Term Issuer Default Rating from 'CCC+' to 'B-', with a stable outlook. The agency said the upgrade reflects macro-stabilisation policies backed by structural reforms, better fiscal and external accounts and a modest rebuilding of reserves. 'B-' is still speculative grade, below investment grade. Sri Lanka last held 'B-' in November 2020; it fell to 'RD' after the 2022 default and returned to 'CCC+' in December 2024. Fitch expects government debt to ease to 92.9% of GDP in 2026 from 96.7% in 2025. It sees gross official reserves at US$ 7.7 billion by end-2026, about 2.9 months of external payments, and growth of 4.1%.

New rating: B- (from CCC+) Outlook: Stable Debt forecast 2026: 92.9% of GDP Reserves forecast end-2026: US$ 7.7 billion

Why it matters for exams: The three global credit rating agencies (Fitch, Moody's, S&P), what investment grade means and Sri Lanka's 2022 default are frequent economy questions.

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22 September 2026 Source: Daily FT

In plain words

IDR Issuer Default Rating — Fitch's rating of how likely a borrower is to default on its debt.

RD Restricted Default — Fitch's grade for a borrower that has defaulted on some obligations but not all.

Investment grade — Ratings of BBB- and above, seen as relatively safe for investors.