Fitch has identified four key themes that could further impact economic expectations in the latter half of 2025: trade and tariffs, inflation and interest rates, geopolitics, and fiscal/economic policy.

The agency also reported that by mid-2025, 56 out of 288 sector and asset performance outlooks have shifted from 'neutral' to 'deteriorating,' indicating a worrying trend.

In light of this economic slowdown, Fitch Ratings has downgraded its 2025 global credit outlook, citing increased tariffs, uncertainty in US policy, and rising geopolitical tensions.

In a significant move, President Donald Trump announced plans to send 12 tariff letters on July 7, 2025, which will affect various countries, including Sri Lanka, already facing a suspended 44% tariff.

US tariffs are particularly concerning, with potential revisions to the economic outlook heavily influenced by these rates.

Global real GDP growth is projected to slow to 2.2% in 2025, a decline from 2.9% in the previous year.

Despite these challenges, Sri Lanka's tourism revenue showed resilience, rising by 12.1% year-on-year to $169.5 million in June 2025, contributing to a total of $1.71 billion in the first half of the year.

Additionally, private credit in Sri Lanka expanded significantly in May 2025, reflecting a shift in financial behavior amidst ongoing economic challenges and changes in government taxation.