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Sri Lanka’s credit outlook upgraded

Jul 18, 2011 8:05:41 AM - itnnews.lk

Moody’s Investors Service has raised Sri Lanka’s sovereign rating outlook to positive from stable.

It cited a “peace dividend” of greater economic and financial stability. On 14 September, Standard & Poor’s (S&P) upgraded Sri Lanka’s long-term foreign currency sovereign credit rating to B+ and the long term local currency rating to BB- with a stable outlook. Moody said in a statement that Sri Lanka has started to reap a peace dividend that has accrued to the economy and the security environment. The economy is expected to grow sustainably at around 8 to 9 percent over the medium term as confidence is further bolstered and investment picks up.

Central Bank Governor Nivard Cabral forecasts economic growth to accelerate to 8.5 percent this year, from a 32-year high of 8 percent in 2010, because of rising demand and investment after the conflict. BOI said Sri Lanka received a record 236 million US Dollars of foreign direct investment in the first quarter of this year, with the tourism industry attracting most of the inflows.