Sri Lankan Economic Crisis Highlights

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Sri Lanka

Sri Lanka

Sri Lankan Economic Crisis Highlights-Sri Lanka, historically known as Ceylon, is a South Asian island country whose official name is the Democratic Socialist Republic of Sri Lanka. It is located in the Indian Ocean, southwest of the Bay of Bengal and southeast of the Arabian Sea; the Gulf of Mannar and the Palk Strait separate it from the Indian subcontinent.

  • Capital-Colombo,  Sri Jayawardenepura Kotte, Kotte.
  • Currency-Sri Lanka Rupee.
  • Population-2.19 Crores.
  • Official Languages-Sinhala and Tamil.
  • President-Gotabaya Rajapaksa.

Highlights of the Sri Lankan Economic Crisis

  • Authorities close Colombo’s Galle Face Green Park in anticipation of protests; Opposition plans to file a no-confidence vote against the government.
  • Meanwhile, Sri Lanka’s main opposition party, Samagi Jana Balawegaya (SJB), announced on Friday that it will move a no-confidence motion against President Gotabaya Rajapaksa’s government and is prepared to impeach him if he fails to address the public’s concerns about the country’s worst economic crisis.
  • As nationwide protesters demanded the President’s and the Rajapaksa family’s resignations from office, Opposition Leader Sajith Premadasa called for the Executive Presidency to be dissolved, saying authority should be split among the Executive, Legislature, and Judiciary.
  • Sri Lanka’s central bank raised its key interest rates by an unprecedented 700 basis points on Friday to manage inflation, which has skyrocketed due to acute shortages of essential necessities brought on by the country’s devastating economic crisis.
  • Fuel, power, food, and, increasingly, medication are in short supply since the severely indebted economy has little money left to pay for imports.
  • Despite a five-day state of emergency and a two-day curfew, street protests have been ongoing for more than a month.

Reason for Crisis

  • The South Asian republic has become a textbook example of a twin deficit economy, with national expenditure exceeding national revenue and imports exceeding exports.
  • Foreign currency reserves are in short supply.
  • The pandemic effect is a term used to describe a situation in which a
  • Inflation caused by the Russia-Ukraine conflict.
  • Agribusiness is in a state of emergency.
  • FDI has dropped dramatically.

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