Sri Lanka: Inflation rate jumps to 70.2% in August

Sri Lanka: Inflation rate jumps to 70.2% in August
Vegetable Seller in Pettah. August 25, 2022 Colombo, Sri Lanka. Getty Images

Sri Lanka’s annual inflation rate surged to more than 70% in August because it struggles with its most severe economic crisis in more than 70 years.

Official data furthermore showed food costs rose by 84. 6% compared to last year.

The South Asian nation of 22m people was stepped into financial and political chaos this season as it faced a shortage of foreign currencies.

The country has been not able to afford key imports – including gas, fertiliser and medication.

Last 30 days, the Central Financial institution of Sri Lanka said it expected pumpiing to ease, as the nation’s economy slowed, after peaking at about 70%.

Official figures released last week showed which the economy had caught by 8. 4% in the three months to the end of Aug.

Before the pandemic, Sri Lanka was heavily dependent on tourism for foreign currencies, including the US dollar.

However , boundary closures aimed to slow the distribute of Covid-19 kept tourists away plus took a major cost on the country’s economic climate.

That, along with many years of financial mismanagement, resulted in Sri Lanka defaulting upon its debts recording.

Earlier this particular month, Sri Lanka arrived at a preliminary deal with the International Monetary Account for a $2. 9bn (£2. 6bn) mortgage. However , the agreement hinges on the country also receiving funds through private creditors.

Upon Tuesday, India said it had began talks with Sri Lanka on restructuring its debt and stated it would also offer long lasting investments. India earlier provided almost $4bn in financial aid in order to its smaller neighbour.

India also deferred payment on Sri Lankan imports of approximately $1. 2bn plus offered a line of credit of $55m intended for fertiliser imports.

Sri Lankan government officials are due to fulfill creditors on Fri, to discuss the degree of the country’s economic problems and a proposal to restructure its debts.

2px presentational grey line

You may also be interested in this:

This particular video can not be performed

To try out this video you need to enable JavaScript within your browser.