Why Sri Lanka Experiencing Its Worst Economic Crisis In Decades

In addition to the consequences of the Covid-19 epidemic, the Sri Lankan economy has been suffering from one of the greatest economic crises it has ever experienced due to mismanaged government finances and poorly timed tax reductions. The country’s economic progress has been hampered by a series of lockdowns, rising inflation, a scarcity of fuel, a decline in foreign currency reserves, and currency depreciation, among other factors.

sri lanka

According to government figures, economic growth in Sri Lanka was 1.8 percent in the fourth quarter of the fiscal year 2021, which brought the country’s annual growth rate to 3.7 percent. It was lower than the 1.8 percent expected in the previous quarter. The central bank of Sri Lanka had predicted a growth rate of 5 percent for the entire year ahead. Several countries, including India, China, and Bangladesh, have provided help to Sri Lanka. The International Monetary Fund has also approached to provide financial assistance (IMF).

What led to this crisis?

Sri Lanka’s economy was already at risk before the breakout of the Covid virus epidemic in the country. Additionally, the lockdowns had a substantial detrimental impact on the informal sector, which accounts for around 60% of all workers in the country, compounding the country’s issues. Foreign currency reserves have plummeted by 70% in the last two years, making it increasingly difficult to pay for imports such as food and gasoline. Or, to put it another way, a severe lack of foreign currency was the root cause of the financial crisis.

When the Covid outbreak occurred, it had a severe impact on the tourism business in the country. In addition, remittances from Sri Lankan expatriates have plummeted. Even though the country would have to make $4 billion in debt payments this year, the country’s foreign reserves were only $2.31 billion as of February. Colombo thinks tank Advocate Institute’s Dhananath Fernando claims that “the reason for the shortages is not a lack of any goods, but rather a lack of cash.” The $4 billion debt includes a $1 billion international sovereign bond with a maturity date of July that is part of the $4 billion debt.

Power was out for periods of up to ten hours at a time.

Already fuel shortages created extensive power outages that lasted for many hours daily. Power interruptions extended to 10 hours on Wednesday, bringing the daily power outages to 20 hours. Power shortage occurring every seven hours for citizens all around the country since the beginning of the month. There is around a 750-megawatt gap in thermal power generation due to a lack of fuel for hydropower generation. Officials in Sri Lanka warned AFP that the country’s reservoirs were dangerously low due to the lack of rain over the past few months.

Coal and oil are imported in limited quantities due to a scarcity of forex cash reserves. The country’s primary fuel retailer, the state-owned Ceylon Petroleum Corporation PC (CPC), estimated that it would take two days to complete the project. Those who are delayed in long lineups at gas stations should leave and not return until imported petroleum has been unloaded and distributed by the Canadian Petroleum Corporation (CPC).

Fight for gas supplies.

Because of the severity of the crisis, people have to battle to obtain even the most essentials. Following periodic protests by thousands of people standing in line for gasoline last week, Sri Lanka dispatched troops to the country’s gas stations. Fuel shortages resulted in long lines at gas stations and rolling power outages in numerous regions. Several thermal power plants across the country are down due to diesel shortages.

Fuel prices have increased by 92 percent, and diesel prices have increased by 76 percent since the beginning of the year. Sources claim that it took around 12 days for $44 million in LP gas and kerosene to be paid for the last batch of supplies.

Depreciation of a currency

According to the Sri Lankan central bank, the Sri Lanka Rupee has been devalued by 15%, depending on the conditions. The Central Bank of Sri Lanka has set a dollar-to-LKR exchange rate cap of 230 rupees, an increase from the previous maximum of 200-203 LKR, which is effective immediately. In December, CBSL launched a flurry of measures an additional 10 LKR every dollar as an incentive. However, remittances decreased by 61.6 percent in January, from $675 million a year earlier, demonstrating that the initiatives had little impact.


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18 thoughts on “Why Sri Lanka Experiencing Its Worst Economic Crisis In Decades

  1. #op 🇱🇰 Sri Lanka .Part this comes down to corruption in Sri Lanka by President and others in Government this led mass poverty for the people energy Black outs China Owens most of infrastructure projects Habour Air Port well being involved in other sectors have been many protests this year Allready .IMF is Talking about bailout for Sri Lanka this year how bad it is going get nobody knows the war In Ukraine just part of problem corruption over the years has did this Sri Lanka .Bilbergs and Council of foreign relations and Trialation commission are at work as well currency speculators like hedges funds cartels.Curfew to stop people from protests https://www.aljazeera.com/news/2022/4/2/sri-lanka-in-36-hour-nationwide-curfew-to-quell-unrest. Sri Lanka probable is not going away . Either Tunisia 🇹🇳 with IMF Or 🇸🇩 Sudan 🇸🇩Protests we Support them all in the struggle restance .If Protests are organized to help outside Embassies this brings problem to a lot more people .Anonymous and Activests will do all they can to help. Tunisia 2011 We help bring About Arab Spring .We are Legion Gladiators we do forget expect us . #We Stand With Ukraine 🇺🇦 🇱🇰Sri Lanka.Tunisia .Sudan .Myamar.

    1. Hi Anonymous world change place hopefully all bigger collective Hackivests cyberspace skills can come to use . In many countries maybe make list of ops figures of what can achieve .

  2. Hello Anonymous,

    We, Sri Lanka’s are currently facing the hugest crisis right now😞
    It’s time to ask your help.
    Please Anonymous we need your cyber support legends 💪😍

    #AnonymousSaveSrilanka #anonymoussavesrilanka #anonymous #Anonymous #Anonymoushelpsrilanka

  3. #Anonymoushelpsrilanka
    #anonymousforthevoiceless #Anonymous #AnonymousPost

    Thats the only thing we kindly request from you as innocent citizens of most beautiful but badly corrupted country SRI LANKA 🇱🇰

  4. We the citizens have had enough of this stupid, corrupted family governance. Expose the assets and illegal earnings of Rajapaksa family as means of justice so they can be guilty forever with a black mark on their faces! We are forever grateful for you guys if you all can look into this matter! ✌🏼

    1. #Anonymoushelpsrilanka
      #anonymousforthevoiceless #Anonymous #AnonymousPost

      Thats the only thing we kindly request from you as innocent citizens of most beautiful but badly corrupted country SRI LANKA

  5. Corrupt politicians taking control making people voiceless , using excessive forces ,need to get this to IOC’;s pls

  6. Thank you Loves from the Sri Lanka. Really thankful. Please help to take back our money from Sri Lankan dirty politicians

  7. Hello Anonymous,

    We, Sri Lanka’s are currently facing the hugest crisis right now😞
    It’s time to ask your help.
    Please Anonymous we need your cyber support legends 💪😍

    #AnonymousSaveSrilanka #anonymoussavesrilanka #anonymous #Anonymous #Anonymoushelpsrilanka


  8. Best thing you can do is , publish all the wealth of Rajapakshas down to all the top Civil servants who collaborated to rob the country

  9. I tried sending anonymous an email explaining the situation. However, I didn’t receive any response. Since we are not professionals and experts on Networking and Hacking, we plead help from anonymous experts. Please help. We are yet another country of beautiful people strangled to death by politically created economic crisis. No food, no feal, no domestic cooking gas, no medicine, no money, no foreign reserves, no paper to print learning material and exam papers for children. BUT, one family or the current ruling regime of Rajapaksa family denies all this. More than five people died waiting in the long queues for Patrol and Diesel. Patients are dying without having essential medicine. Still they are not willing to step down although protests and demonstrations are carried out Island wide. Please help us and reveal the hidden money of these corrupted leaders. We need your help Anonymous. We can stand against them and we are doing it at the moment. But, you can help our fight with your greatest intelligence and expertise. You are our shadow fighters, we need you! Please fight with us!

  10. From Sri Lanka
    It’s most difficult situation currently in Sri Lanka.
    Some people are giving their life for fights with Sri Lanka economy.
    No gas No electricity
    It’s been very hard time in every single Sri Lankan
    Please this is the time for ask your help
    Everyone’s money or citizens of Sri Lanka their money stolen by one family and current president call Rajapaksha
    So please give their black money details and help us to kik their ass and make a new president and new Sri Lanka
    #AnonymousSaveSrilanka #anonymoussavesrilanka #anonymous #Anonymous #Anonymoushelpsrilanka

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