May 01, 2022
- Sri Lanka is facing its worst economic crisis since its independence. Shortages of fuel, food, medicines and other basic amenities, as well as power outages, have paralysed the country.
- Sri Lanka has become a twin deficits economy, which means the country’s imports are greater than its exports and the national expenditure exceeds the national income.
- Sri Lanka has a massive foreign debt of around $5 billion. It is dependent on imports for most essential items like sugar, cereals and pulses. But the country is deficient in foreign reserves and has no money to pay for its import bills.
- Tourism, which accounts for over 10% of the island nation’s gross domestic product (GDP), was adversely affected due to the COVID-19 pandemic.