Sri Lanka could go bankrupt this year

Sri Lanka is facing a deepening financial and humanitarian crisis as inflation rises to record levels with predictions that it could declare bankruptcy this year (in 2022) as inflation reaches new highs, along with food prices soaring and its coffers run dry. According to media reports, the meltdown faced by the government, led by president Gotabaya Rajapaksa, is in part caused by the immediate impact of the Covid crisis and the loss of tourism but is compounded by high government spending and tax cuts eroding state revenues, vast debt repayments to China. As per the World Travel and Tourism Council, the loss of employment and important foreign currency from tourists, which typically provides over 10% of the nation's GDP, has been significant, with over 200,000 individuals losing their jobs in the travel and tourism industries. The situation can be described as bad when long lines have been established at the passport office of the young and educated, who have expressed a desire to leave the nation. 

As per reports, in November of 2021, inflation reached a new high of 11.1%, leaving people who were formerly well-off to struggle for feeding their families, while basic necessities have become expensive for many. Following Rajapaksa's declaration of an economic emergency, the military was granted authority to guarantee that necessary products, like rice and sugar, were supplied at government-set rates, but this has done nothing to alleviate people's suffering. The World Bank estimates 500,000 people have fallen below the poverty line since the beginning of the pandemic, the equivalent of five years’ progress in fighting poverty.