Md. Illias Hossen: Sri Lanka’s economy is changing. Inflation rate reached 6.3 percent in July this year from a peak of 69.8 percent in September 2022. Inflation in the country fell to 4 percent in August. AFP.
This is the lowest rate of inflation in Sri Lanka since the onset of the unprecedented economic crisis last year. This information has been confirmed in official data on Friday.
When the foreign exchange reserves fell to alarming levels, the supply of food, fuel and medicines to the country stopped for months and the people suffered greatly. At that time President Gotabaya Rajapaksa was ousted through protests.
After the new government came to power, the Sri Lankan economy gradually changed. Inflation rate reached 6.3 percent in July this year from a peak of 69.8 percent in September 2022. In August it come to 4 .
Sri Lanka’s central bank has expressed hope that this downward trend in inflation will continue for the next few months.
Last year, the country became ‘bankrupt’ after defaulting on $46 billion in foreign debt. Later in March, the country received a $2.9 billion bailout package from the International Monetary Fund (IMF) over 4 years.
An IMF team will arrive this month to inspect Sri Lanka’s economic reforms. His departure will depend on receiving the next installment of $330 million.
The IMF recently said that Sri Lanka’s economy is showing signs of turning around, but the country needs to go through some more painful reforms.
Gotabaya was ousted by his successor Ranil Wickremesinghe, who doubled taxes, withdrew subsidies from the energy sector and raised fuel prices several times to boost state revenue. The government has increased petrol and diesel prices by 11.2 percent from Friday.