We, as a country had some major problems in the past few months which leads to high inflation in Sri Lanka.
The political and economical decisions in the country and the Covid outbreak throughout the world affect the current situation of the country.
However, the fuel and gas shortages, lack of electricity supply, and the price hike of essential goods put the people in an uncomfortable situation which leads to mass protests all over the country.
And now, things become somewhat normal, but millions of Sri Lankans still suffer from the worst economic crisis ever.
According to Human Rights Watch, This month, the United Nations renewed a humanitarian appeal. stating that 28 percent of the population faces food insecurity and that the poverty rate this year has doubled.
And also, according to the Central Bank of Sri Lanka, food price inflation is over 85 percent in October. The shortages of Dollars lead to the limitation of imports and it hits the essential goods. As well as essential medicines.
On the other hand, with the PTA act and the arrests of the activists. Human Rights Watch states that;
Without respect for human rights, including the right to peacefully protest, Sri Lankans cannot hold politicians accountable, whether for mismanagement or corruption. It is essential that Sri Lanka’s international partners, including the United States and European Union, press the government to fulfill its human rights obligations as an essential step towards addressing the crisis.
Debt crisis and Inflation in Sri Lanka
However, in April, Sri Lanka defaulted on over US$50 billion in debts to international creditors. And in September it reached a staff-level agreement with the IMF for a four-year, $2.9 billion bailout. Not only that, the first tranche of that bailout would ease the crippling shortage of foreign exchange. And unlock access to other funding, including from the World Bank and Asian Development Bank. But, it cannot provide new funding until the IMF agreement is completed.