If you look at the state of the value-added-tax, it has been subject to a lot of delays and setbacks, so we won't know if it will be implemented until it happens,
The ratings on Sri Lanka are vulnerable due to the country's high government debt and ongoing large fiscal deficits.
We have yet to see how the law is going to be implemented, how much revenues would it generate and how these additional collections would be spent.
The stable outlook reflects revised expectations concerning the prospects of policy continuity and adherence to fiscal consolidation, which foreshadows improved chances for overall deficit reduction and stabilization of the country's debt dynamics.
Local and provincial governance needs to be improved. There will have to be hard budget constraints.
The fact that the suspension is lifted is obviously very positive news.
A resumption of full-scale hostilities could have negative implications for the country's already stressed fiscal and debt position, and likely impair its previously adequate level of external balances.
What is important is the process of charter change itself as well as the outcome, whether it will materialize or not, does not affect this policy making economic reforms, especially fiscal consolidation.
Sharp declines in the government?s external debt indicators and structural improvements that, over time, should help Pakistan?s export capacity motivated the change in outlook for the foreign currency rating.
The outlook could revert to stable if substantial and tangible progress is achieved in maintaining the official cease- fire.
