Sri Lanka’s economy seems to be falling apart in the debt trap. Sri Lanka has taken a loan of about $ 3500 million from different countries of the world. Out of this, it has to repay more than $400 million in debt this year. The government of Sri Lanka, burdened with debt, is now finding it difficult to provide two-time bread to its people, far from repaying the debt.
Sri Lanka is the worst-hit by China’s debt. According to the report of the International Monetary Fund and the Central Bank of Sri Lanka, China has given 10 percent of the foreign debt on Sri Lanka.
Mistakes and circumstances have led to
Let us tell you that in 2021 there was an economy of $ 8400 million. The growth rate of GDP has been declining continuously since 2011. The economy was of 4200 crores in 2009 and 8800 crores in 2018. In 2018, the VAT rate was reduced from 15 per cent to 8 per cent.
Tourism was badly hit in 2019 after a bomb blast in Colombo killed 253 people. Due to this there was a sharp decline in the income of Sri Lanka.
Rising inflation is increasing the difficulty
Inflation in Sri Lanka rose to 18.8 per cent in March this year. In the capital Colombo, this rate was 15.1 percent. At the same time, the food inflation rate was 25.7 percent in February, which has reached its highest level in a decade. Alam is that a cup of tea available for Rs 25 is now getting more than Rs 100.
Other countries did not offer good
Sri Lanka has been trapped in the debt trap of China for the last 15 years. Beijing offered a better loan than the US and India. For this reason, Sri Lanka continued to show more interest in taking loans from China than from other countries. China would have given Sri Lanka as a loan strategy.
And the backbone of the collapsing economy
According to the World Bank report, the number of poor in Sri Lanka is increasing rapidly. In the year 2019, the number of poor was 9.2 percent. In 2020, this rate increased to 11.7 percent, according to this, more than five lakh people earn less than Rs 230 a day. During the lockdown, the government had identified 50 lakh people who did not have money to eat.
These countries are already facing economic crisis
1-Venezuela: The GDP rate shrank by two-thirds between 2014 and 2020. In 2022, it declined by another five per cent. According to the United Nations, in March 2019, 94 percent of the Venezuelan population was living in poverty.
2-Myanmar: After the military coup, 1.6 million people lost their jobs here in 2021. The textile and tourism industries were badly affected in the conflict between the military and the government. 25 million people went below the poverty line, which is half the population of Myanmar.
3-Sudan: The ongoing conflict between the military and the common people continues to damage the GDP. GDP declined by 8.4 per cent in 2020 as compared to 2.5 per cent in 2019. In the year 2020, the inflation rate had gone up to 124.9 percent.