Inflation eases sharply in bankrupt Sri Lanka

COLOMBO: Sri Lanka’s inflation eased to 12 p.c in June, official information confirmed Saturday, the bottom figures for the reason that island nation careened into an unprecedented financial disaster final 12 months.
Sri Lanka defaulted on its $46 billion overseas debt in April 2022 and the general public endured months of meals, gasoline and drugs shortages.
The disaster has eased since, with the federal government securing a $2.9 billion bailout from the Worldwide Financial Fund in March.
June inflation was the bottom for the reason that 9.9 per cent determine recorded in November 2021.
It’s down from 25.2 per cent in Could and a peak of 69.8 per cent in September.
“Inflation is predicted to achieve single-digit ranges by early third quarter 2023,” the Central Financial institution of Sri Lanka stated.
This week, the federal government unveiled a debt restructuring plan which affords a 30 per cent haircut for worldwide sovereign bondholders, who account for greater than 1 / 4 of Sri Lanka’s excellent overseas obligations.
The IMF stated final month that Sri Lanka’s economic system confirmed “tentative indicators of enchancment” however warned Colombo nonetheless wanted to pursue painful reforms.
Final 12 months’s financial disaster sparked months of civil unrest which finally toppled then-president Gotabaya Rajapaksa.
His successor Ranil Wickremesinghe has doubled taxes, eliminated beneficiant subsidies on power and sharply raised costs to shore up state income.

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