Sri Lankans line up to buy food on September 3, 2021, in Colombo (AFP / Archives / Ishara S. KODIKARA)
Food prices in Sri Lanka rose from a record 22.1% in December, according to official figures released on Saturday, as the country struggles to finance imports to cope with an acute shortage of basic necessities.
The rise in food prices last month reached a record year-on-year level since the launch of the Colombo consumer price index in 2013, the statistics department said.
In November, it had reached 17.5%, which was already a record.
In general, inflation rose to 12.01% in December, again a level not seen since the start of the statistics.
In his New Year’s message, President Gotabaya Rajapaksa expressed the hope of reviving the economy, but did not announce any measures to resolve the foreign exchange crisis.
International rating agencies have downgraded Sri Lanka over fears the South Asian country will default on its $ 26 billion debt.
The island’s economy, which depends on tourism, has been hit hard by the coronavirus pandemic and the government has been forced to impose a broad import ban in order to maintain foreign currency reserves.
For months, supermarkets have rationed powdered milk, sugar, lentils and other essentials as banks run out of dollars to pay for imports.
This week, the government raised the price of powdered milk by 12.5%, after a similar rise in fuel prices last month.
Last month, a senior agriculture official warned of impending famine and called on the government to put in place an orderly food rationing system to avoid such a scenario. He was fired a few hours after making this appeal.
Food shortages were compounded by the ban on imports of agrochemicals, which was finally lifted in November after poor harvests and intense protests by farmers.
Sri Lanka’s foreign exchange reserves stood at just $ 1.58 billion at the end of November, up from $ 7.5 billion in 2019.
Thanks to a Chinese loan of 1.5 billion dollars, they almost doubled to reach 3.1 billion dollars at the end of December.
The country’s central bank has appealed for foreign currency – even small change that people may have after returning from trips abroad.
© 2022 AFP
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