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Sri Lanka Economic Crisis: A huge setback to citizens amid inflation in Sri Lanka, highest interest rates in 21 years

Photo:AP Sri Lanka

Highlights

  • Sri Lanka’s central bank hikes key policy rates to 14.50% and 15.50%
  • Inflation has greatly increased the problems of the poor and downtrodden of Sri Lanka
  • Shortage of essential items like food, fuel, cooking gas and medicines

Sri Lanka Economic Crisis: The country has almost gone bankrupt due to the wrong economic policy of the previous government in Sri Lanka. Now that the country is on the path of reforms, the common people are also bearing the brunt of it. Inflation is at its peak in Sri Lanka. In view of this, the central bank of Sri Lanka has raised key policy rates to 14.50 percent and 15.50 percent.

Central bank governor Nandlal Veerasinghe said the local deposit facility rate and fixed loan facility rate charged from commercial banks have been increased by one percentage point each to 14.50 and 15.50 percent, respectively. The recent spurt in the prices of essential commodities has added to the problems of Sri Lanka’s poor and downtrodden.

acute shortage of essential goods in sri lanka

People in Sri Lanka are facing shortage of essential items like food, fuel, cooking gas and medicines. “Our priority is to bring inflation down to a reasonable level as soon as possible. The sooner that happens, the better,” Virasingh said, anticipating inflation to touch 70 per cent. Sri Lanka’s inflation in June has reached close to 55 percent.

Inflation hit 60 lakh Sri Lankans

The United Nations agency ‘World Food Program’ (WFP) released a report saying that about 6.26 million Sri Lankans are currently facing food insecurity due to rising inflation. That is, three out of 10 families in Sri Lanka do not know how to arrange for the evening meal after the morning meal. Record inflation, skyrocketing fuel prices and rising prices for daily necessities have forced nearly 61 per cent of Sri Lankan households to cut back on their daily expenses. Due to this reduction, now the people of Sri Lanka are not even able to eat nutritious food properly.

Farmers’ condition is worst

The WFP report claimed that the worst situation in Sri Lanka with regard to food insecurity is that of people associated with agriculture. More than half of the households in this section are facing food insecurity. That is, they do not know how their next meal will be arranged. Sri Lanka is facing its worst economic crisis since gaining independence in 1948.

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Shivam Bangwal

Shivam Bangwal is an Indian based entrepreneur who is a tech, travel and coding enthusiast with a post graduation degree on Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Hitchhike TV, Branding Panther and many more.
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