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After overcoming the crisis, Sri Lanka’s inflation rate is zero

March 30, 2024 4:17 am

After the unprecedented economic crisis in Sri Lanka two years ago, inflation reached zero.9 percent in March, according to the country’s statistics office. Annualized inflation is now at its lowest level since the crisis.

In April 2022, the island nation defaulted on $46 billion in foreign debt. There was such a crisis of foreign exchange in the country that the government was not able to import food, fuel and other necessary goods for the life of the citizens.

If one considers the current rate of the Colombo Consumer Price Index with inflation of 70 per cent in September of that year, one would have to call it very low.

The country’s central bank said the lending rate has now fallen from 10 percent to 9.5 percent, a sign of ongoing economic progress.

Due to the economic crisis of the time, then President Gotabaya Rajapaksa was forced to step down after months of protests in Sri Lanka. His successor Ranil Wickremesinghe then took over, raising taxes, cutting fuel subsidies and accepting a $2.9 billion “rescue package” from the International Monetary Fund (IMF). The current ruling government and the IMF believe that the country is gradually overcoming the economic crisis due to austerity.

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