Breaking News - Sri Lanka faces its worst-ever economic crisis, here’s why?

Sri Lanka has witnessed the worst ever economic crisis in the country. The inflation in the island nation currently stands at 17.5%, the fifth consecutive monthly record high.

The fuel prices in the country have skyrocketed. Sri Lankans could be seen queuing up at Petrol Pumps for weeks due to an exponential rise in fuel prices and the fuel shortage. This has crossed to such an extent that as per Police Officials, at least two people have lost lives while waiting in the long queues for fuel. As protests emerged across the country, the government deployed troops across the country. Due to the fuel shortage, the majority of the country is witnessing frequent Power Cuts.

Sri Lanka had been facing an economic crisis for quite a while and due to the lack of foreign currency, they are unable to pay for oil imports. A majority of the economic trouble can be associated with the lack of foreign currency in the nation. Because of the inadequate foreign reserves, Sri Lanka is unable to pay for oil imports, food, and other essential goods. Sri Lanka’s major source of income was Tourism, which was hampered badly due to the Covid Crisis. Since 2020, their foreign reserves have seen a dip of 70%, thus adding to the economic woe.

The doppler effect of the never seen before the crisis has been spread so much that merely in the last month, the food prices have increased by 25%.

The economic crisis has rippled so fast that the schools have had to cancel the examination due to paper-shortage. Schools have postponed examinations indefinitely due to an acute paper shortage. Due to this, two major newspapers in Sri Lanka have suspended their publication.

Over that, the nation has a massive foreign debt that it took for some infrastructure projects. In 2021, the country took foreign debts worth $ 35 billion. Out of the total debt, China accounts for about 10% of it. India has already lent a helping hand to the crisis-hit country by extending two different credit lines worth a whopping $ 1.5 billion.