SJB welcomes SL’s credit rating upgrade 

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SJB MP Dr. Harsha de Silva 

• SJB MP Dr. Harsha de Silva says it’s a positive development for SL’s economy benefitting both Govt. and private sector investors
• Notes earlier downgrade discouraged foreign investment, with companies like Adani Group citing credit risks during project negotiations
• Attributes credit rating upgrade to economic measures implemented by former Govt. including key legislation and stabilisation efforts
• Stresses continued reforms are necessary to sustain this momentum and further improve credit ratings

Samagi Jana Balawegaya MP Dr. Harsha de Silva has welcomed the recent upgrade of Sri Lanka’s credit rating by leading global agencies, Moody’s and Fitch Ratings, calling it a significant milestone for the nation’s economic recovery.

Speaking at a press conference held yesterday, Dr. de Silva remarked, “The credit rating improvement is not only good news for the Government but also for the entire economy, including private sector investors who were severely impacted by the debt crisis.” He highlighted how the downgrade of Sri Lanka’s credit rating had discouraged foreign investment, citing the example of India’s Adani Group, which raised concerns about credit risks during negotiations for electricity projects.

Despite the positive development, Dr. de Silva cautioned that Sri Lanka is still not in a position to access international financial markets for borrowing. He attributed the credit rating upgrade to the initiatives undertaken by the previous Government, including key legislation and economic stabilisation efforts, rather than new policies introduced by the current administration. “The agreement reached prior to the Presidential Election has remained unchanged and has directly contributed to this credit rating improvement,” he stated.

He also criticised the National People’s Power (NPP) Party for making unfulfilled promises, such as proposing an alternative debt sustainability analysis during its election campaign. “False promises by the NPP misled the people, but continuing with the previously established economic reforms has proven beneficial for the country,” he asserted.

Dr. de Silva noted Sri Lanka’s recent exit from default status after it was declared a defaulter on 12 April 2022, following its announcement of an inability to repay external debt. While he acknowledged this as a step forward, he explained that the country remains unable to re-enter the international financial market or issue sovereign bonds. He estimated that it would take until at least 2027 for Sri Lanka to regain active participation in global financial markets, provided the Government adheres to its reform agenda.

Discussing the nation’s economic progress, Dr. de Silva pointed to a 5.5% growth in the third quarter of 2024 and emphasised the importance of continuing reforms to maintain upward momentum in credit ratings. “The stock market has shown signs of improvement, but investor confidence has been undermined by misleading statements from the NPP Government. Continuity of President Ranil Wickremesinghe’s economic program has been the foundation for stabilising the economy,” he added.

He also stressed the need for disciplined economic management to secure a substantial loan from the International Monetary Fund (IMF) in 2027. While acknowledging the significant challenges ahead, Dr. de Silva expressed optimism that Sri Lanka’s standing in the global financial community could improve if reforms are sustained.

Reflecting on the pre-election promises of the NPP, Dr. de Silva criticised their claim that the debt sustainability analysis could be altered, arguing that such changes would have jeopardised the country’s credit rating improvements. Instead, he emphasised that the steady continuation of the existing economic framework has been instrumental in fostering the nation’s recovery.