Sri Lanka inflation hits record high as food crisis looms

Sri Lanka
By Editor_1
A woman carries food bags in Colombo while people behind her queue outside a State-run supermarket – Getty Images
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COLOMBO – Sri Lanka’s inflation hit a record 11.1% in November, official figures showed Wednesday (22), and authorities warned a worsening economic crisis could prompt further food rationing.

The island’s tourism-dependent economy was hammered by the pandemic and the government imposed a broad import ban to shore up foreign exchange reserves, triggering shortages of essential goods.

Supermarkets have for months been rationing milk powder, sugar, lentils and other essentials as commercial banks ran out of dollars to finance foreign goods.

The shortages have also driven up prices, with food costs up 17% from a year ago according to Sri Lanka’s census and statistics department.

Inflation figures on-year were the highest since the department launched its National Consumer Price Index (NCPI) in 2015.

Authorities may have to impose further food rations and seek foreign aid to help feed the most needy, agriculture ministry secretary Udith Jayasinghe told reporters.

“We may have to borrow grains such as corn from friendly countries and think of rationing food so that mothers and the sick can be fed,” he said.

“Others may have to make sacrifices.”

Food shortages have been worsened by the government’s ban on agrochemical imports, which was lifted last month after widespread crop failures.

Sri Lanka had foreign reserves of just $1.58 billion at the end of November, down from $7.5 billion when President Gotabaya Rajapaksa took office in 2019.

The central bank has appealed for foreign currency – even loose change that people may have after returning from overseas trips.

-Agence France-Presse

 

Editor_1
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