Sri Lanka, Feb. 20 -- Fitch Ratings has noted that Sri Lanka's latest budget demonstrates a strong commitment to increasing fiscal revenues as a share of GDP, a move that could address a key weakness in the country's credit profile. However, the agency warns that risks to the fiscal outlook remain significant, and a slowdown in fiscal consolidation could hinder long-term debt reduction.

The budget, presented on February 17, is the first under President Anura Kumara Dissanayake's administration and provides insight into its economic reform agenda. Fitch views the budget announcements as consistent with its previous assumptions, which led to Sri Lanka's credit rating upgrade to 'CCC+' from 'RD' in December 2024. The provisional budget defi...