Sri Lanka on the brink of bankruptcy with record high inflation and mounting dues
Sri Lanka sank into a gap to deepen the financial and humanitarian crisis. With the inflation arises, the highest recording, zoom prices of food, and disruption caused by a pandemic driving dry coffers, the island country was feared bankrupt this year.
This country needs to pay around $ 7.3 billion in domestic and foreign loans in the next 12 months, a report by the British Newspaper Guardian. This includes G A $ 500 million payment of international rulers due in January. In November, foreign currency reserves were available for only $ 1.6 billion, he said.
In addition to the direct impact of the Covid-19 pandemic and the consequences of tourism losses, high government expenditure and tax erodication income, extensive debt payments to China, and recorded low foreign exchange reserves aggravating the economic crisis in front of Gotabaya Rajapaksa-Government Led.
A Spurt in printing money to turn off domestic loans and foreign bonds pushed inflation to 12.1 percent in December from 9.9 percent a month. Monthly inflation is measured by the Colombo consumer price index driven by a monthly increase in food and non-food prices.
December food price inflation jumped to 22.1 percent from 17.5 percent a month earlier, the country’s central bank announced.
The World Bank estimates that 500,000 people have fallen below the poverty line since the beginning of the pandemic, equivalent to the progress of five years in fighting poverty, the report said.
Losing work and vital foreign income from tourism, which usually accounts for more than 10 percent of the country’s GDP, has been substantial, with more than 200,000 people losing their livelihoods in the travel and tourism sector, according to the travel board and tourism of the world.
President Rajapaksa in a new year’s message expressed hope to revive the economy that lacked money but did not announce the steps to overcome the crippling foreign exchange crisis. “I am sure that the new year will provide an opportunity to continue the steps taken by the government to pursue and overcome the challenges and strengthen the economy of people-centered to people,” he said.
The international rating agency has reduced Sri Lankan rating and raises concerns about its ability to serve its debt of $ 26 billion, report Hinduism.