# Sri Lanka sovereign credit rating trajectory

> Live situation record from CLSTR: https://clstr.news/situations/sri-lanka-sovereign-credit-rating
> Updated: 2026-08-25T01:24:32.000Z. Sources: 9. Developments: 3.

In late July 2026, Standard & Poor's reaffirmed Sri Lanka’s sovereign credit rating at CCC+, highlighting stronger tax collection and a notable rise in debt‑transparency scores that placed the country among the world’s fastest‑improving economies. The Institute of International Finance’s 2026 report supported this, ranking Sri Lanka fourth among the world’s fastest‑improving economies for debt transparency and investor relations, with its score rising from 37.33 to 43.67. However, S&P noted that high public debt and reliance on external financing keep the profile vulnerable.

By July 29, S&P Global Ratings reported the rating remained stable at a B‑minus level, citing progress in macroeconomic policy, political stability, and foreign‑exchange liquidity despite external shocks like cyclone Ditwa and Middle-East conflicts. The agency also noted an upgraded Transfer and Convertibility Assessment, reflecting growing investor confidence.

In late August 2026, Moody’s Ratings affirmed Sri Lanka’s credit rating at Caa1 with a stable outlook. While acknowledging that fiscal reforms under an IMF program have improved revenue generation, Moody’s cautioned that the country faces a high debt burden, with debt projected to reach 95% of GDP in 2026, alongside significant challenges from high interest costs and external vulnerabilities.

## Claims

- Moody’s affirmed the Philippines’ Baa2 investment-grade credit rating with a stable outlook. (single source)
- The Philippines’ fiscal deficit is expected to narrow to 3.9% of GDP in 2026. (single source)
- Moody’s affirmed Sri Lanka’s Caa1 foreign currency long-term issuer rating with a stable outlook. (single source)
- Sri Lanka’s government debt is projected to be 95% of GDP in 2026. (single source)
- Moody’s upgraded Pakistan’s local and foreign currency sovereign ratings to B3 from Caa1. (single source)
- Pakistan’s foreign exchange reserves reached approximately $17 billion at the end of July 2026. (single source)
- Pakistan’s external vulnerability indicator improved to 145% in 2026 from 230% in 2025. (single source)

## Timeline

### 2026-08-25: Moody’s issues updated credit ratings for Philippines, Sri Lanka, and Pakistan

Moody’s Ratings affirmed the Philippines’ Baa2 rating, upgraded Pakistan to B3 following reserve growth, and maintained Sri Lanka’s Caa1 rating amid ongoing fiscal reforms.

4 sources. https://clstr.news/cluster/moodys-issues-updated-credit-ratings-for-philippines-sri-lanka-and-pakistan

### 2026-07-29: Sri Lanka and Papua New Guinea See Credit Rating Improvements

S&P kept Sri Lanka’s rating at B‑ minus, while Moody’s and S&P gave Papua New Guinea a positive outlook, reflecting fiscal reforms and stronger reserves.

4 sources. https://clstr.news/cluster/sri-lanka-and-papua-new-guinea-see-credit-rating-improvements

### 2026-07-27: Sri Lanka Keeps CCC+ Credit Rating Amid Boost in Debt Transparency Rankings

S&P reaffirmed Sri Lanka's CCC+ rating, citing stronger tax revenue, while an IIF report ranked the country fourth among fast‑improving economies for debt transparency and investor relations.

4 sources. https://clstr.news/cluster/sri-lanka-keeps-ccc-credit-rating-amid-boost-in-debt-transparency-rankings

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Cite as: Sri Lanka sovereign credit rating trajectory. CLSTR, https://clstr.news/situations/sri-lanka-sovereign-credit-rating