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Inflation in Sri Lanka hits 70% as crisis-hit economy continues to struggle with high food prices


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Inflation in Sri Lanka hits 70% as crisis-hit economy continues to struggle with high food prices

Inflation in Sri Lanka hits 70% as crisis-hit economy continues to struggle with high food prices

Faced with the depletion of foreign exchange reserves, the Sri Lankan government is desperately awaiting the disbursement of 2.9 billion dollars from the IMF, which would… 23.09.2022, Sputnik International

2022-09-23T10:04+0000

2022-09-23T10:04+0000

2022-09-23T10:04+0000

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Consumer inflation in Sri Lanka reached 70.2% for the month of August, mainly due to high food prices, which recorded a year-on-year increase of 84.4% compared to last August . Inflation in the non-food category in August was recorded at 57.1%, down from 52.1% in July, according to the latest figures released by the Sri Lanka Census and Statistics Department. The headline inflation rate in July was recorded at 66.7%. The Central Bank of Sri Lanka said last month inflation would start to decline once it hit 70%. The grim economic figures were released as President Ranil Wickremesinghe awaits an official nod from the country’s foreign creditors – India, China, Japan, other countries and private bondholders – to restructure their respective loans. -level deal with the International Monetary Fund (IMF), under which the Western lender would pay a $2.9 billion package to the cash-strapped economy. However, the disbursement of IMF funds is conditional on the agreement of Colombo’s foreign creditors to restructure their loans. On Thursday, ambassadors from 23 lending countries pledged their support for the Sri Lankan government in restructuring their loans when they met Wickremesinghe during a forum at the president’s residence office in Colombo.Finance Secretary Mahinda Siriwardena , told local media that officials from lending countries, including China, India and Japan, will hold online talks with Colombo to come up with concrete plans for debt restructuring. the country of 22 million people has faced its worst economic crisis in more than seven decades, spurred by depleting foreign exchange reserves, preventing the island nation from paying for imports of food, fuel, medicine and other essentials. In April, Colombo announced that it would default on its external debt to the tune of $51 billion in view of the economic crisis.

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Sri Lanka, IMF, inflation, Japan

Sri Lanka, IMF, inflation, Japan

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Faced with depleting foreign exchange reserves, the Sri Lankan government is desperately awaiting the disbursement of $2.9 billion in IMF funds, which would bolster the government’s ability to pay for imports of food and other essential items. .

Consumer inflation in Sri Lanka reached 70.2% for the month of August, mainly due to high food prices, which recorded a year-on-year increase of 84.4% compared to last August .

Inflation in the non-food item category in August was recorded at 57.1%, down from 52.1% in July, according to the latest figures released by the Sri Lanka Census and Statistics Department.

The headline inflation rate in July was recorded at 66.7%.

The Central Bank of Sri Lanka said last month that inflation would start to decline once it hit 70%.

Meanwhile, official statistics released this month showed the economy contracted 8.4% compared to the same period last year.

The grim economic figures were released as President Ranil Wickremesinghe awaits an official nod from the country’s foreign creditors – India, China, Japan, other countries and private bondholders – to restructure their respective loans.
A protester holds the Sri Lankan flag outside the president's office in Colombo, Sri Lanka, Wednesday, July 20, 2022. - Sputnik International, 1920, 17.09.2022

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Earlier this month, the Sri Lankan government reached a staff-level deal with the International Monetary Fund (IMF), under which the Western lender would disburse a $2.9 billion package to the economy in lack of cash. However, the disbursement of IMF funds depends on the agreement of Colombo’s foreign creditors to restructure their loans.

On Thursday, ambassadors from 23 lending countries pledged their support for the Sri Lankan government in restructuring their loans when they met Wickremesinghe at a forum at the president’s office in Colombo.

Finance Secretary Mahinda Siriwardena told local media that officials from lending countries including China, India and Japan will hold online talks with Colombo to come up with concrete debt restructuring plans.

The country of 22 million people has faced its worst economic crisis in more than seven decades, spurred by depleting foreign exchange reserves, which has left the island nation unable to pay for imports of food, fuel, medicines and other essential items.

In April, Colombo announced that it would default on its external debt to the tune of $51 billion in view of the economic crisis.



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