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Colombo (Reuters) – Sri Lanka’s inflation rate fell to 12 percent in June, official data showed on Saturday, the lowest figure since the island nation plunged into an unprecedented economic crisis last year.
Sri Lanka defaulted on its $46 billion foreign debt in April 2022 and the public suffered months of food, fuel and medicine shortages.
The crisis has eased since then, with the government securing a $2.9 billion bailout from the International Monetary Fund in March.
Inflation in June was the lowest since the 9.9 per cent recorded in November 2021.
It is lower than 25.2 percent in May and higher than 69.8 percent in September.
“Inflation is expected to reach single-digit levels by early third quarter of 2023,” the Sri Lankan central bank said.
This week the government unveiled a debt restructuring plan that offers a 30 per cent discount to holders of international sovereign bonds, which account for more than a quarter of foreign liabilities owed to Sri Lanka.
The International Monetary Fund said last month that Sri Lanka’s economy He showed “temporary signs of improvement” but warned that Colombo still needed to pursue painful repairs.
Last year’s economic crisis sparked months of civil unrest that toppled then-President Gotabaya Rajapaksa.
His successor Ranil Wickremesinghe doubled taxes, removed generous energy subsidies and sharply raised prices to shore up state revenue.
Sri Lanka defaulted on its $46 billion foreign debt in April 2022 and the public suffered months of food, fuel and medicine shortages.
The crisis has eased since then, with the government securing a $2.9 billion bailout from the International Monetary Fund in March.
Inflation in June was the lowest since the 9.9 per cent recorded in November 2021.
It is lower than 25.2 percent in May and higher than 69.8 percent in September.
“Inflation is expected to reach single-digit levels by early third quarter of 2023,” the Sri Lankan central bank said.
This week the government unveiled a debt restructuring plan that offers a 30 per cent discount to holders of international sovereign bonds, which account for more than a quarter of foreign liabilities owed to Sri Lanka.
The International Monetary Fund said last month that Sri Lanka’s economy He showed “temporary signs of improvement” but warned that Colombo still needed to pursue painful repairs.
Last year’s economic crisis sparked months of civil unrest that toppled then-President Gotabaya Rajapaksa.
His successor Ranil Wickremesinghe doubled taxes, removed generous energy subsidies and sharply raised prices to shore up state revenue.
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