Sri Lanka, Feb. 20 -- The Sri Lankan government's budget highlights the authorities' commitment to raising fiscal revenues as a share of GDP - an approach that, if successful, would alleviate a long-standing weakness in the sovereign's credit profile, says Fitch Ratings.

Nonetheless, risks to the fiscal outlook remain significant, and plans to slow the pace of fiscal consolidation could weigh on prospects for debt reduction over the medium term.

The budget, unveiled on 17 February, is the first since President Anura Kumara Dissanayake of the Janatha Vimukthi Peramuna (JVP) was elected in September 2024, and provides greater clarity over the administration's medium-term fiscal and economic reform agenda.

We view most of the budget annou...