Real opportunity for economic renewal as part of the post-war transformation of Sri Lanka amidst a more settled political and security environment should allow policymakers to focus more on economic issues, including construction and development in areas directly affected by the war - a process that has already begun, according to Fitch Ratings.
In a press release this week, the agency stated that in addition, the labour force will effectively expand to include these same areas, and costs such as transport and insurance should decline. Tourism receipts have already started to increase sharply year on year and private investment inflows are supplementing government borrowing initiatives.
Fitch assigned the Democratic Socialist Republic of Sri Lanka's upcoming USD-denominated international bond issue, which matures in 2015, a 'B+' rating.
The rating is in line with Sri Lanka's Long-term foreign currency Issuer Default Rating of 'B+', which has a Stable Outlook. Fitch revised the Outlook on Sri Lanka's ratings to Stable from Negative on 9 October 2009 based on positive changes to sovereign credit fundamentals following the end of the 26-year civil war, the approval of a US$2.6 billion IMF agreement and the return of private sector capital inflows.