Sri Lanka’s food prices hit record highs as shortages hit
Sri Lanka’s food prices rose a record 22.1 percent in December, official figures showed on Saturday, as the country struggles to finance urgent imports to cope with a severe shortage of food. essential products.
The Census and Statistics Department said food inflation hit a record high last month on an annual basis since the launch of the Colombo Consumer Price Index (CICC) in 2013.
Prices rose in December from a 17.5% figure in November, the previous record, the department said.
He added that headline inflation was also at a record 12.01 percent in December, the highest since the launch of the CCPI index.
President Gotabaya Rajapaksa, in his New Year’s message, expressed hope of reviving the cash-strapped economy, but did not announce measures to deal with the crippling currency crisis.
“I am convinced that the new year will be an opportunity to continue the measures taken by the government to meet and overcome the challenges and strengthen the people-centered economy,” he said.
International rating agencies downgraded Sri Lanka’s rating and expressed concerns about its ability to service its $ 26 billion debt.
The latest inflation figures were released a day after the government raised the price of powdered milk by 12.5% ââfollowing a similar rise in fuel prices last month.
The island’s economy, dependent on tourism, has been hit hard by the pandemic and the government has been forced to impose a broad import ban to bolster foreign exchange reserves.
For months, supermarkets have rationed powdered milk, sugar, lentils and other essentials as commercial banks run out of dollars to pay for imports.
A senior agricultural official warned last month of impending famine and called on the government to implement an orderly food rationing program to avoid such a scenario. He was fired hours after he appealed.
Food shortages were compounded by the government’s ban on imports of agrochemicals, which was lifted in November after widespread poor harvests and intense protests by farmers.
Sri Lanka had foreign exchange reserves of just $ 1.58 billion at the end of November, up from $ 7.5 billion when Rajapaksa took office in 2019.
This week, the government withdrew a $ 1.5 billion Chinese loan and claimed reserves had nearly doubled to $ 3.1 billion by the end of 2021.
The central bank has appealed for foreign currencies – even loose change that people may have after returning from trips abroad.
aj / axn