Sri Lanka, First Published Mar 30, 2022, 3:22 PM IST
Tourism freeze:
The economy of Sri Lanka is dependent on tourism. Tourism has been paralyzed by the corona epidemic for the past two years, and the economy has plummeted to an all-time low. As a result, the foreign exchange reserves in Sri Lanka fell sharply and the Sri Lankan rupee depreciated sharply. Sri Lanka has declared a state of economic emergency to control the rise in food prices and hoarding due to the currency devaluation and the economic crisis.
Forex Depreciation:
Due to the decline in foreign exchange reserves, there was a problem in importing food items, including petroleum fuels, from abroad. As a result, there is a severe shortage of essential commodities in the country, including rice and pulses. And the price of these has skyrocketed. There is also a shortage of milk powder, kerosene, cooking gas and medicine. Also, people stand in long queues at petrol stations to buy petrol and diesel. Military security has been put in place at petrol stations to prevent further violence.
Economic Crisis:
An economic emergency has been declared in Sri Lanka under the Public Security Act to curb hoarding of food items and control the prices of essential commodities. This year alone, the Sri Lankan rupee has depreciated by 7.5% against the US dollar. The Sri Lankan rupee has depreciated by more than 20% against the US dollar since the change of government in 2019 and the takeover of the Gotabhaya Rajapaksa-led government. And as a result of the paralysis of the tourism sector due to the spread of the corona, the country’s economy fell by 3.6%.
Sri Lankan rupee depreciates:
The Sri Lankan rupee has depreciated by more than 275 against the US dollar. Sri Lanka has the highest inflation in Asia at 15.1%. The Sri Lankan government says food inflation has risen to 25%. Due to the shortage of coal, power cuts are in operation for 7 hours daily. People are suffering due to rising prices and shortages. Thus, the popular struggle erupted for the resignation of President Gotabhaya Rajapaksa, who was morally responsible for the economic crisis.
No Diesel:
The Petroleum Federation has stated that the 37,500 metric tons of diesel currently being brought to Sri Lanka could not be landed. Thus, it has been announced that there will be no diesel in Sri Lanka for 2 days. The government has also advised people not to stand in line today and tomorrow as there is no diesel at petrol stations in Sri Lanka. But diesel is in stock for essential needs. The Petroleum Federation has said that the supply of petrol will be smooth.
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Last Updated Mar 30, 2022, 3:29 PM IST