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EFSAS comments on the economic crisis in Sri Lanka, China and IMF bailout


As a consequence of a series of disastrous economic decisions compounded by corruption, the pandemic, and the war in Ukraine, Sri Lanka found itself earlier this year without any foreign currency reserves to import essential items, including food, fuel and medicines. In April, it defaulted on its foreign debt. The country was hit by severe fuel, food and medicine shortages, crippling debt, negative growth, skyrocketing inflation, and dwindling foreign exchange reserves. All of these problems have persisted till date. To make matters worse, inflation, elevated fuel prices, and shortage of food supplies continue to plague many countries. While the economy is improving in Sri Lanka, the top drivers – tourism, remittances and exports – are not likely to return to pre-pandemic levels anytime soon.