Sri Lanka’s economic crisis: The economic crisis in neighboring Sri Lanka continues to escalate. Sri Lanka is currently facing the biggest economic crisis since independence.
Sri Lanka has taken a big decision during this difficult period and declared their country bankrupt. Sri Lanka has declared that it will not be able to repay the International Monetary Fund’s $ 51 billion foreign debt.
Information provided by the Ministry of Finance
Within a year, Sri Lanka’s total debt had increased by $ 16 billion. As of April 2021, Sri Lanka’s total debt was $ 3500 million. This is up from $ 5100 million in April this year.
In this context, the Sri Lankan Ministry of Finance has announced that all lending institutions, including foreign governments, which have lent to the South Asian country of Sri Lanka, can choose to convert any of their interest payments into cash or pay in Sri Lankan Rupees from Tuesday afternoon.
What are credit details?
Now you can see the details of how much Sri Lanka has borrowed from whom. Sri Lanka has borrowed about 15 percent from China. In addition, 47% of the market is borrowed.
Sri Lanka borrows 13 percent from the Asian Development Bank, 10 percent from the World Bank, 10 percent from Japan, 2 percent from neighboring India and 3 percent from elsewhere.
The Sri Lankan government was the first to borrow from many sources. But now, when it comes time to repay, there is nothing left in its treasury. People in Sri Lanka are suffering on the streets. The opposition is in favor of the people. In this situation, the position of the ruling party has deteriorated.
Sri Lanka at its worst since independence
The pace of economic growth in Sri Lanka was much faster than in India two years ago. In 2020, Sri Lanka’s per capita income was $ 4053 per year at market exchange rate and $ 13,537 per year in terms of purchasing power parity. That is, these levels were much higher than in India at that time.
According to the Human Resource Development Report, Sri Lanka’s position in 2020 was better than that of India. Sri Lanka was ranked 72nd in the United Nations Human Resource Development Report 2020, while India was ranked 131st. But after that time, the environment changed everything. Sri Lanka became completely entangled in a little bit of debt borrowed from China. Today Sri Lanka is facing the worst economic crisis and has gone bankrupt.