Tuesday, 13 January 2015 - 9:20
Peaceful transition of power encourages investment development: says FITCH
The global rating agency, Fitch Ratings said the quick and smooth transition of power in Sri Lanka indicates a basic level of political stability, which could bolster foreign investor confidence.
That would in turn provide more stable funding for the persistent current account deficit.
However, low governance standards are a key weakness for Sri Lanka, as reflected in its 'BB-' rating; a smooth presidential transition may boost foreign investor confidence and mark the start of reforms needed to improve fiscal credibility.
Other key credit weaknesses for Sri Lanka are low foreign direct investment, a high level of net debt and weak public finances.
As such, the formulation of a credible budget consolidation path by the new government would be a credit positive.