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Fitch Upgrades Sri Lanka to ‘B-’ With Stable Outlook

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Fitch Ratings has upgraded Sri Lanka’s Long-Term Issuer Default Ratings (IDRs) to ‘B-’ from ‘CCC+’ and assigned the country a Stable Outlook.

According to Fitch, the upgrade is driven by the implementation of macro-stabilization policies supported by structural reforms that have reduced external financing risks and strengthened the country’s ability to withstand economic shocks.

The ratings agency noted that the improvement is reflected in substantial gains in Sri Lanka’s fiscal and external balances, as well as the gradual rebuilding of foreign exchange reserves.

Fitch stated that continued fiscal discipline and efforts to improve government revenue collection are expected to support sustained primary budget surpluses, helping to place the country’s debt burden on a downward trajectory while reducing the risk of a return to external imbalances.

Despite the upgrade, Fitch cautioned that Sri Lanka continues to face several challenges.

The agency pointed out that the country’s credit profile remains constrained by government debt-to-GDP levels and debt servicing obligations that remain significantly higher than those of many similarly rated countries, even after recent debt restructuring and macroeconomic adjustments.

Economy

Sri Lanka to sign US$ 100 million loan agreement with ADB for economic recovery

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The Sri Lankan government is set to enter into a US$ 100 million loan agreement with the Asian Development Bank (ADB) to support economic recovery and reforms, following the completion of formal loan negotiations.

The Cabinet of Ministers has approved a proposal submitted by President Anura Kumara Dissanayake, in his capacity as Minister of Finance, Planning and Economic Development, to proceed with the loan agreements.

The financing will consist of US$ 50 million in policy-based lending and US$ 50 million in investment financing, provided through the ADB’s Ordinary Capital Resources.

The funds will be utilised to implement the Macroeconomic Recovery Sector Development Programme for Promoting Resilient and Inclusive Economic Opportunities.

According to the government, the Department of External Resources has completed formal negotiations with the ADB regarding the proposed financing.

The latest decision follows Cabinet approval granted on September 7, 2026, to allocate US$ 100 million towards the economic recovery programme.

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Economy

Sri Lanka’s first passenger drone arrives ahead of maiden flight

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Sri Lanka’s first passenger transport drone has arrived in the country, with its maiden flight scheduled to take place at Colombo Port City by the end of October, the Civil Aviation Authority of Sri Lanka (CAASL) has announced.

The drone can carry two passengers and has a flight duration of approximately 30 minutes.

Sri Lanka became the first country to adopt the Global Fast Track Programme launched by Chinese technology company EHang to accelerate the introduction of pilotless electric vertical take-off and landing (eVTOL) aircraft in international markets.

Colombo Port City has been designated as the initial operational zone for the project, which aims to introduce passenger transport services using the aircraft, subject to the necessary regulatory and safety approvals.

Potential routes under consideration include scenic flights over Sigiriya and Pidurangala, as well as passenger transfers between Bandaranaike International Airport in Katunayake and hotels in Colombo.

The initiative is also expected to explore other applications, including tourism and maritime logistics.

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Economy

Sri Lankan scientist helps uncover oldest fast radio burst from 10 billion years ago

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Sri Lankan scientist Themiya Nanayakkara has been part of an international team of researchers that discovered the oldest fast radio burst ever recorded, originating from a galaxy approximately 10 billion years ago.

The groundbreaking discovery, published in the scientific journal Science, could help astronomers better understand the evolution of the universe and the vast network of matter known as the cosmic web.

The research team, led by University of Sydney astrophysicist Dr. Manisha Caleb, included Nanayakkara, who was identified as a co-author of the study.

The mysterious burst, named FRB 20240304B, was first recorded in 2024 by the MeerKAT radio telescope in South Africa.

Scientists subsequently used NASA’s James Webb Space Telescope to trace the signal to a small, actively star-forming galaxy that existed just three billion years after the Big Bang.

Fast radio bursts are extremely powerful flashes of radio waves lasting only a few milliseconds. Despite their brief duration, they can release as much energy as the Sun produces over several days.

Researchers believe these bursts may originate from highly magnetized neutron stars known as magnetars, although their precise origins remain uncertain.

Speaking to Australia’s ABC News, Dr. Caleb described the discovery as extraordinary, noting that the signal began its journey billions of years before the Sun and solar system existed.

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