Sri Lanka, Nov. 11 -- Shortfalls in implementing planned investment spending could weaken Sri Lankan economy's growth potential, making longer-term fiscal consolidation more challenging, Fitch Ratings said.

Meanwhile, Fitch noted that the government's 2026 budget proposals indicate that the authorities remain committed to reducing government debt/GDP over the medium term after beating the targets in the 2025 budget.

Fitch Ratings is also of the view that sustained strong revenue performance will remain key to meeting the government's fiscal goals.

The budget, unveiled on 7 November, targets a deficit of 5.1% of GDP in 2026, wider than the 4.5% that the government expects in 2025. The original deficit target for 2025 in last year's budg...