By Aanya Wipulasena
Colombo, Jan 5 (EFE).- The severe economic crisis affecting Sri Lanka, with record inflation and the possibility of the country failing to pay its financial debts, has forced families to give up meals due to shortage of food and steep prices.
“Our only option was to cut down on food consumption. Sometimes we only have two meals a day. At other times we cook once a day and eat sparingly,” Priyanka Kumari, 44, from Boralesgamuwa in the country’s Western Province, told EFE.
Household incomes have been hit hard by the crisis, while inflation shot up to 11 percent in November, the highest in 13 years.
Kumari said she used to make a living by selling cooked food but had to stop when prices of the ingredients soared, after the government imposed import restrictions to mitigate a foreign currency crisis.
“When we increase prices, people don’t buy,” she said.
Vegetable prices have tripled this December compared to the same month last year, according to the latest National Consumer Price Index.
Prices of rice, a basic food item in the country, have also shot up along with flour and bread, while fuel prices have risen sharply, up to 85 percent in the case of cooking gas.
A drastic fall in tourism due to the pandemic, with the crucial sector coming to a complete halt due to borders being closed for months at a time, has been another blow for Sri Lankans.
“When Covid-29 first hit, the country stopped allowing tourists. As a result, my salary was reduced by 50 percent,” Lahiru Sameera, a 26-year-old former employee of the sector, told EFE.
On Tuesday, the Sri Lankan government announced an aid package worth $1 billion for the poorest section of the country, public sector employees and senior citizens.
Cabinet spokesperson Dullas Alahapperuma said that the aid would help ease economic pressure on these sections of the population.
The measure includes a payout of 10,000 Sri Lankan rupees (around $50) per family to promote home gardening.
Amid the grave economic crisis, Sri Lanka has witnessed its foreign currency reserve dwindle in recent years and is now burdened with high levels of both public and private foreign debt.
The country needs to pay $500 million in international sovereign bonds by the end of January, and around $6.9 billion by the end of the year in domestic and foreign loans, according to rating agency Fitch, which reduced Sri Lanka’s long-term sovereign rating to CC from CCC last month, due to the possibility of the government defaulting on payments.
Sri Lanka’s foreign currency reserves have dropped by around $2 billion since August, going down to $1.6 billion by late November, according to the agency.
However, Colombo has insisted that it would not default on the payments.
Cabinet co-spokesperson and Plantations Minister Ramesh Pathirama told reporters on Tuesday that the tourism sector and exports were gradually improving.
“We are also planning to increase local production. For example, distributing fresh milk instead of powdered milk. We have imported a large amount of medicine for a long time. We have started to produce our medicine,” he said in a presser.
The government is also negotiating credit line facilities with China, India and Japan.