Neighboring country Sri Lanka is facing a huge economic crisis. The situation in Sri Lanka has become so bad that it is no longer in a position to repay the dues to the foreign borrowers. Sri Lanka has now officially declared default on all its external debt. This means that Sri Lanka has given up on paying the debt.
According to Sri Lanka’s Ministry of Finance, creditors, including foreign lending governments, are now free to encash any interest payments or opt for payment in Sri Lankan rupees. Let us tell you that Sri Lanka has a huge debt of $ 51 billion.
Sri Lanka in the worst phase: For the first time since independence, Sri Lanka is going through the biggest economic slowdown. Due to continuous blackouts in the country, life has come to a standstill. At the same time, acute shortage of food and fuel has also put brakes on the country.
Explain that after taking huge debt for infrastructure and other projects, the country has huge foreign debt. The country has to repay foreign debt of around US$7 billion this year alone. Sri Lanka is unable to pay for imported goods due to debt and dwindling foreign reserves.
The Government of Sri Lanka is in talks with the International Monetary Fund for the loan. Simultaneously, it has turned to China and India. At the same time, people have been appealed to limit the use of fuel and electricity.