A fiscal and monetary prudence program backed by the International Monetary Fund and donor loans will partly shield Sri Lanka from the fallout of a European credit confidence crisis, Standard and Poor’s rating agency has said. High spending Greece was one of the first countries to be hit by jittery investors who are nervous about rolling over loans.

Other European nations with weak fiscal management and high debt, including Spain and Portugal have also been feeling the effect of nervous lenders of late. Standard & Poor's said while Asian nations like Japan, India, and Taiwan did not have large external borrowings, Sri Lanka, Pakistan and Mongolia did.

"Sri Lanka, Pakistan, and Mongolia have significant external borrowings," S & P's credit analyst Elena Okorotchenko said in..