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Article

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Sri Lanka recorded a rapid increase in public debt-to-GDP ratio to 119 per cent from 42 per cent over a few years. Access to the international capital market was lost, export earnings plummeted, and import payments swelled up due to global price increases, prompting depletion of foreign exchange reserves to critically dangerous levels. Export earnings from tourism – which were $4.4 billion in 2018 or 5.6 per cent of GDP – dipped to 0.8 per cent of GDP. Remittances started drying up too, shrinking from $612 million in April 2021 to $205 million by February 2022. Petroleum prices tripled from $40 a barrel to $120 in a short span of time, making it almost difficult for the government to find the resources to place orders for replenishing or building stocks. As FDI was channeled mainly to cater to the domestic market demand, the profits were repatriated in foreign exchange thereby further putting pressure on the current account.

Publication Source

The News

Publication Date

7-29-2022

Pages

1-4

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