Amid Economic Crisis & Neck-deep Debt, Inflation Surges To 29.8% In Sri Lanka

From used cars costing more than an apartment to medicines, fuel and food getting out of reach, it's all happening in the economic crisis-hit island nation of Sri Lanka. Adding to insult to injury are the recent inflation figures of this neighbouring nation of India.

As per a PTI report, debt-ridden Sri Lanka's overall inflation surged to 29.8% in the recently concluded month of April 2022. This signals a nearly 10% rise from the March inflation figures of 18.7%, according to data published by the government's Census and Statistics Office.

Food inflation reportedly spiked from 30.21% in March 2022 to 46.6% in April 2022.

Reuters

The lack of foreign currency amid the crisis has meant that the country cannot afford to pay for imports of staple foods and fuel, leading to acute shortages and very high prices, as per PTI.

Months of lengthy blackouts, food scarcity, fuel and pharmaceutical shortages have triggered widespread protests in Sri Lanka, calling for the president¡¯s resignation.

Seeking Help Amid Neck-deep Debt

Sri Lanka reportedly needs at least $4 billion to tide over its mounting economic woes. Talks with international institutions such as the World Bank and IMF as well as countries such as China, India and Japan for financial assistance have been going on.

Last month, the Sri Lankan government had said it would temporarily default on its $51 billion foreign debt.

BBC

Also Read: China's 'Debt-Trap Diplomacy' Believed To Be Behind Sri Lanka Crisis, Claims Report

Commenting on the negotiations with the IMF, the Sri Lankan Finance Ministry said the key areas discussed include addressing the immediate need of restoring supply chains of essential items, including fuel, LP gas, and pharmaceuticals.

Other main points discussed include securing bridge financing in the interim period until the IMF financing with an economic programme is finalised, and implementing short to medium-term policies to ensure macroeconomic stability and facilitate greener, more inclusive, sustainable, and stable growth in the country, as per PTI.

India, on the other hand, has agreed to extend an additional USD 500 million credit line to help Sri Lanka import fuel. New Delhi has also already agreed to defer USD 1.5 billion in import payments that Sri Lanka needs to make to the Asian Clearing Union.

Also Read: How Sri Lanka's Economic Crisis Has Led To Used Cars Costing More Than A Luxury Flat

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