Sri Lanka inflation climbs as food prices rise

Last Updated on June 30, 2024 9:16 am

At the height of Sri Lanka’s economic crisis when it defaulted on its foreign debt in 2022, inflation had risen to nearly 70%.

Crisis-hit Sri Lanka’s annual inflation almost doubled to 1.7%t in June, up from 0.9% the previous month, as food prices began rising again, official data showed Saturday.

The Census and Statistics department data came days after Sri Lanka secured a deal with its bilateral creditors to restructure $10 billion in debt, a key condition to maintain an IMF bailout programme.

Food inflation returned, with prices rising 1.04% in the year to June, having been flat a month earlier, the department said.

At the height of Sri Lanka’s economic crisis when it defaulted on its foreign debt in 2022, inflation had risen to nearly 70%.

The Central Bank of Sri Lanka expressed hope on Saturday that it would be able to maintain overall inflation below 5.0% for 2024.

The country is due to hold a presidential election this year, and opposition parties have vowed to renegotiate the terms of the IMF bailout, which has led to painful austerity measures.

The IMF has said it is willing to listen to alternative proposals from rival political parties, but stressed that the benchmarks set in the bailout had to be adhered to.

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