The situation in Sri Lanka is deteriorating rapidly. The Sri Lankan economy with a population of about 22 million was already in trouble. Now the situation has become uncontrollable. The prices of everyday items like milk, bread, sugar, rice have reached the sky. It has become difficult for a large section of the population to buy them.
There is a long line at the pump for fuel. There are reports of people’s fierce protest against the government. To control the situation, the government has deployed military at gas stations. More than a dozen refugees are reported to have reached Tamil Nadu. After all, how did this condition of Sri Lanka, which is called the Lanka of gold, happened?
Sri Lanka imports most things
Sri Lanka imports most of its items. This includes everything from medicine to oil. The share of petroleum products in its total imports was 20 per cent in December last year. For some time now, the government of Sri Lanka has failed to import essential items. Due to this there has been a shortage of essential things there. Due to insufficient supply of essential items, their prices have reached the sky.
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skyrocketing prices of essential commodities
According to a Reuters report, people’s lives have become hell due to rising food prices. The cost of a cup of tea in a restaurant has reached Rs 100. There the price of rice has reached Rs 290 per kg. The price of sugar is Rs 290 per kg. 790 rupees have to be paid for 400 grams of milk powder. Sri Lanka’s economy has been hit hardest by rising crude prices and declining revenues from tourism. Inflation there has reached 15 percent, which is the highest in Asia. The condition of the economy is deteriorating day by day.
no foreign exchange for import
The government of Sri Lanka does not have foreign exchange to import essential commodities. The Corona epidemic has had an impact on Sri Lanka’s foreign exchange reserves. Actually, tourism has a big hand in the economy of Sri Lanka. This country, with an economy of $ 81 billion, earns $ 3.6 billion from tourism. About 30 percent of tourists to this country come from Russia, Ukraine, Poland and Belarus. The corona epidemic had a great impact on tourism. Now due to the war of Russia-Ukraine, the income from tourism has decreased a lot.
debt-ridden economy
Sri Lanka has an external debt of about $ 32 billion. In this way, the government of Sri Lanka faces a double challenge. On the one hand, he has to pay the foreign debt and on the other hand he has to rescue his people with difficulty. The government is left with no option but to seek financial help from the International Monetary Fund (IMF). Citigroup has said in its report that the Sri Lankan government will have to restructure the foreign debt by July. The reason for this is that the government does not have the money to repay the debt of $1 billion in July.
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