World Bank no longer working with Sri Lanka . . .
On Wednesday morning, Sri Lankan Prime Minister Ranil Wickremesinghe was sworn in as Minister of Finance, Economic Stabilization and National Policies. He will work with the International Monetary Fund (IMF) to lead debt talks, something he had criticized President Gotabaya Rajapaksa for doing when in Opposition. Amid Sri Lanka’s ongoing economic crisis, the World Bank has announced it will no longer offer the country new financing options until it works with the IMF to restore economic stability. Wickremesinghe has hit the ground running as Finance Minister, already putting in place arrangements for firms to restructure the country’s C$66-billion external debt.
Inflation continues to skyrocket . . .
Sri Lanka’s Central Bank announced last Thursday that inflation could rise to 40 per cent in the coming months after hitting 30 per cent in April, with food prices rising 46 per cent year-on-year. As inflation soars, measures are being taken to stabilize the economy’s long-term fundamentals, although short-term effects will continue to raise inflation and prices of consumer goods. Power and Energy Minister Kanchana Wijesekera announced on Monday that gasoline and diesel prices would increase by 20 to 24 per cent and 35 to 38 per cent, respectively, with immediate effect, and daily purchase limits would be implemented. Humanitarian aid shipments from India have started to arrive, with a substantial initial consignment of staples such as rice, milk powder, and essential medicines.
Looking for escape . . .
Sri Lanka’s crisis continues to hit its marginalized communities hardest, with starvation motivating some Tamils from the country’s north to flee by boat, destined for the Indian state of Tamil Nadu. Indian authorities have recorded the arrival of 85 Sri Lankan Tamils who successfully navigated the 24 km sea crossing in recent weeks. Over the years, many have made the same voyage, with more than 58,000 Sri Lankan Tamils recorded as residing at refugee camps in Tamil Nadu as of 2021. On Tuesday, the Sri Lankan Navy arrested a further 67 people attempting to flee Sri Lanka for Australia by boat. Such actions only reflect the dire situation in the country.
- BNN Bloomberg: Sri Lanka PM set to be named finance minister to lead debt talks
- Channel News Asia: Sri Lanka increases fuel prices to address economic crisis
- Deutsche Welle: Sri Lanka Tamils fleeing to India to escape economic crisis