January 3, 2022
1 min read

SRI LANKA 2022: Financial Crisis Deepens

The crisis is compounded by high government spending and tax cuts eroding state revenues, vast debt repayments to China and foreign exchange reserves at their lowest levels in a decade…reports Asian Lite News

 Sri Lanka is facing a deepening financial and humanitarian crisis with fears it could go bankrupt in 2022 as inflation rises to record levels, food prices rocket and its coffers run dry, The Guardian reported.

The meltdown faced by the government, led by the strongman president Gotabaya Rajapaksa, is in part caused by the immediate impact of the Covid crisis and the loss of tourism but is compounded by high government spending and tax cuts eroding state revenues, vast debt repayments to China and foreign exchange reserves at their lowest levels in a decade, the report said.

Inflation has meanwhile been spurred by the government printing money to pay off domestic loans and foreign bonds.

The World Bank estimates 500,000 people have fallen below the poverty line since the beginning of the pandemic, the equivalent of five years’ progress in fighting poverty.

Inflation hit a record high of 11.1 per cent in November and escalating prices have left those who were previously well off struggling to feed their families, while basic goods are now unaffordable for many, The Guardian reported. After Rajapaksa declared Sri Lanka to be in an economic emergency, the military was given power to ensure essential items, including rice and sugar, were sold at set government prices – but it has done little to ease people’s woes, the report added.

ALSO READ: Lankans blame Rajapaksa family for economic crisis

Previous Story

Finally, Philippines will have India’s Brahmos missiles

Next Story

UK To Lure Indians With New Visa Schemes

Latest from -Top News

Multi-alignment, upgraded

With US ties strained and China tense, New Delhi taps Europe’s harder edge for co-development, clean tech and strategic autonomy, writes Manoj Menon India is recalibrating its great-power hedging as frictions with

India-EU Trade Deal Breakthrough Soon?

Negotiators report increased momentum in discussions, which have been given a boost from US President Donald Trump’s tariff offensive…reports Asian Lite News India and the European Union aim to finalise a trade

Europe Seeks Peace in Gaza

European countries condemn Israeli interception of Gaza-bound flotilla, demand safety of citizens…reports Asian Lite News Israel’s interception of an international flotilla carrying humanitarian aid to Gaza has sparked condemnation across Europe, with

GAZA: Egypt to Host Peace Talks

Egypt hopes the discussions will help “end the war and the suffering of the brotherly Palestinian people, which has continued for two consecutive years…reports Asian Lite News Egypt will host Israeli and

‘My Injuries Made Me’

During his four-year battle with injury, the incumbent fast bowling spearhead made occasional appearances but couldn’t bear the workload and demands of red-ball cricket….reports Asian Lite News England tearaway Jofra Archer believes
Go toTop

Don't Miss

Cargo ship fire: Dead animals drift ashore in SL

The dead marine creatures were found on beaches from Puttalam

China’s energy push in Lanka sparks security worries

In addition to Hambantota port, China has invested in hydropower