Failed harvests, import restrictions, an increase in global prices of essential commodities, and a diminishing foreign reserve has allowed Sri Lanka to reach the inglorious position of having the highest inflation rate in Asia.
Sri Lanka’s consumer prices rose by 14.2% in January 2022, higher than the 13.2% estimated by Bloomberg. The Average Annual Inflation rate also increased by 6.9%.
The nation’s foreign reserves were at $3.1 billion in December 2021, but it has a total of $7 billion in debt repayments in 2022. The quickening prices also forced the Central Bank it increase its main interest rate for the first time.
President Gotabaya Rajapakse’s administration announced a $1 billion relief package to raise the salaries of government employees and offer farmers compensation for failed crop harvests.
At the same time, the government has begun importing rice from India and negotiated a debt restructure with China following the securing of a $1.5 billion swap line and a $400 million facility from India.
No.820, Mount Cresent,Malabe,Sri Lanka