Sri Lanka is facing its worst economic crisis since its independence.
May 01, 2022
Sri Lanka is facing its worst economic crisis since its independence. Shortages of fuel, food, medicines and other basic amenities, as well as power outages, have paralysed the country.
Sri Lanka has become a twin deficits economy, which means the country’s imports are greater than its exports and the national expenditure exceeds the national income.
Sri Lanka has a massive foreign debt of around $5 billion. It is dependent on imports for most essential items like sugar, cereals and pulses. But the country is deficient in foreign reserves and has no money to pay for its import bills.
Tourism, which accounts for over 10% of the island nation’s gross domestic product (GDP), was adversely affected due to the COVID-19 pandemic.