📈 Govt. targets B- sovereign rating by early 2027 ahead of global market return

Sri Lanka's National People’s Power (NPP) Government is aiming for its first sovereign credit rating upgrade since the debt crisis, targeting a B- rating by early 2027 to prepare for a return to international capital markets. Key Highlights: • Rating Upgrade & Market Entry: Treasury officials confirmed discussions are underway with three major global rating agencies to upgrade Sri Lanka from its current CCC+ status to B- by early next year. This is crucial as the country plans to raise US$ 1.5 Bn in 2027-28. • Debt Reduction: Public debt declined to 98.3% of GDP in 2025 and is projected to fall to 86.7% by 2032, driven by fiscal reforms, primary surpluses, and progress under the IMF-supported program. Debt-to-GDP remains a primary concern for rating agencies. • Market Sentiment: CoPF Chairman Dr. Harsha de Silva stressed that external perception is vital. He noted that Sri Lanka's governance-linked bonds maturing in 2035 are trading at "very high" yields of 8.3%-8.5%, indicating that internal fiscal improvements must be matched by restored investor confidence. Four consecutive upgrades are needed to return to the pre-crisis B+ level.