Export diversification will help Sri Lanka navigate emerging market volatility: PM

Prime Minister Ranil Wickremesinghe has shot back at international economists who group Sri Lanka among Asia’s most vulnerable to global emerging market volatility, saying that it is building long term financial stability by diversifying its exports.

He told CNBC that Sri Lanka’s exports are moving beyond the traditional tea and apparel into higher-value goods and services, in an interview conducted on the sidelines of the World Economic Forum on ASEAN in Hanoi, Vietnam yesterday.

Despite concerns voiced earlier this month by ratings agency Fitch about a “challenging” external debt servicing outlook, high government debt and political uncertainty following regional polls, Wickremesinghe said he didn’t believe Sri Lankan sovereign bonds were on the verge of a downgrade.

“We and many others are running deficits in Asia and that certainly would be a matter of concern, but so far we have been able to negotiate with the rating agencies and it has certainly not affected our borrowing capacity,” he said.

Sri Lanka’s government debt remains high at around 77% of GDP.