Sri Lanka inflation hits record high as food crisis looms
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Sri Lanka's inflation hit a new record, and authorities warned of a worsening economic crisis that would prompt further food rationing.
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Food expenditures have risen 17% from a year ago in Sri Lanka.
Official numbers released Wednesday indicated that Sri Lanka's inflation reached a new high of 11.1% in November, and authorities warned that a growing economic crisis could lead to more food restrictions.
The pandemic wreaked havoc on the island's tourism-dependent economy, prompting the government to enact a comprehensive import embargo to shore up foreign exchange reserves, resulting in shortages of vital supplies.
Milk powder, sugar, lentils, and other basics have been rationed in supermarkets for months as commercial banks have run out of money to fund international items.
Food expenditures have risen 17% from a year earlier, according to Sri Lanka's census and statistics agency, as a result of the shortages.
On-year inflation was at its highest level since the agency began tracking the National Consumer Price Index (NCPI) in 2015.
"We may have to borrow grains such as corn from friendly countries and think of rationing food so that mothers and the sick can be fed," he said. "Others may have to make sacrifices."
The government's restriction on pesticide imports, which was eased last month following catastrophic crop failures, has exacerbated food shortages.
At the end of November, Sri Lanka had only $1.58 billion in foreign reserves, down from $7.5 billion when President Gotabaya Rajapaksa assumed office in 2019.
Sri Lanka faces a severe economic crisis
Sri Lanka is facing a severe economic crisis amid shortages in foreign currency causing shortages of food, crude oil, and other basic commodities. Last month, the authorities lifted restrictions on fertilizer imports for tea, the country's main exports commodity.
But before farmers' planned protests in the capital, Sri Lanka's Agriculture Ministry said it would lift a broader ban on agricultural chemicals including herbicides and insecticides.
"We will now allow chemical inputs that are urgently needed," Ministry Secretary Udith Jayasinghe told the private News First TV network. She added that "considering the need to ensure food security, we have taken this decision."
