Sri Lankan Inflation is on New Highs
The official data of Sri Lanka has shown that inflation is increasing continuously during April and reached a record high. The situation is becoming more alarming due to the terrible petrol shortage and rising food prices.
The data of the CPI-Consumer Price Index showed an increase of 33.8 % in April on year on year basis. It is almost 6 times earlier 5.5% inflation earlier this year.
If we talk about Annual food inflation, it is also alarming at 45.1%.
Around 22 million people in Sri Lanka are encountering a serious scarcity of food and medicines. The present situation in Sri Lanka is getting severe due to the foreign exchange crises.
The people of Sri Lanka want the resignation of President Gotabaya Rajapaksa over this economic crisis. They are expressing their concerns through protesting outside the president’s office.
There is a possibility of an increase of 35% in petrol prices and a 65% increase in diesel prices due to which inflation is expected to jump up more in May.
The country is facing a serious petrol shortage because only a few of the pumping stations are supplying petrol with long queues outside their pumps.
There is no doubt that Sri Lanka is declared bankrupt and last month this country demanded emergency aid from International Monetary Fund. The defaulted external debt is around 51 billion US dollars.
There are several reasons for the Sri Lankan crisis such as a drop in tourism income and remittances from foreign workers. Since the start of the Coronavirus pandemic, this country has been in real trouble.