Nisha Shari, a self-employed woman with a disability who lives in the city of Kandy, said she is finding it extremely difficult to make ends meet. Chicken and lentils have gone up by at least 55 and 117 percent, respectively, since 2019. The price of white rice, a common Sri Lankan staple, increased by 93 percent since 2019. In comparison, food inflation was -1.4 percent in March of 2019.Įssentials, even locally produced ones, have become unaffordable for many. Sri Lanka’s food inflation in March was 30.2 percent, which means the average price of food cost 30 percent more compared to the year before, a record high. In a review of the country’s economy last month, the International Monetary Fund (IMF) said public debt has hit “unsustainable levels” and foreign exchange reserves are insufficient for near-term debt payments. With debt payments of about $7bn due in 2022 – including $1bn in international sovereign bonds (ISB) maturing in July – Sri Lanka may find itself with no usable reserves.Īt $12.55bn, ISBs make up the largest share of Sri Lanka’s foreign debt, with the Asian Development Bank, Japan and China among the major lenders. On March 18, I ndia gave Sri Lanka a $1bn line of credit to pay for essentials such as food and medicine.Īs of February, Sri Lanka only had $2.31bn in its foreign exchange reserves, according to its central bank. In February, it borrowed $500m from India to buy oil. In January this year, Sri Lanka a ppealed to China to reschedule its debt. In June 2021, Bangladesh loaned Sri Lanka $200m and in December it renewed the credit facility. Sri Lanka was already grappling with Asia’s highest rate of inflation because of lockdowns during the COVID pandemic and the diminished tourism industry before Russia’s war against Ukraine added to its woes.Ī hard-currency squeeze saw food and fuel shortages, with people queuing for kilometres outside petrol stations and power cuts as long as seven hours.Ĭash-strapped Sri Lanka has taken short-term loans from India, China and Bangladesh. Protesters surrounded the parliament complex on Tuesday, demanding solutions for the economic crisis. The parliament said it would debate the ongoing crisis until Thursday. In the face of public anger, the cabinet of ministers resigned in full on Monday, and a new finance minister was appointed. There is a great deal of dissatisfaction with the powerful Rajapaksa family, whose members hold several top positions in government, including President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa. Thousands have recently taken to the streets in massive protests across the country demanding the president’s resignation. The cost of living in the tourism-reliant country has become unbearable for many. Here’s how much basic necessities now cost in the country of 22 million people. Food prices on the island nation rose by a record 30 percent in March alone. Sri Lanka is facing its worst financial crisis in more than 70 years.
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