Colombo July 29 2022: Sri Lanka’s headline inflation surged to a record in July as food and fuel remained scarce amid depleted foreign exchange reserves.
Official data on Friday showed consumer prices in the capital Colombo rose 60.8% from a year ago. That compares with the 62% jump from a median estimate by three economists in a Bloomberg survey.
Prices are still soaring even as economic activity has almost ground to a halt amid nationwide rationing of fuel and power outages against the backdrop of political turbulence. The uncertainty risks delaying the bailout from the International Monetary Fund and friendly nations crucial to the island nation alleviating shortages of fuel, food and medicines.
The World Bank said it’s deeply concerned about Sri Lanka’s dire economic situation and the creditor wants to see a reform plan in place before it can offer new financing.
The country’s central bank has raised borrowing costs by 950 basis points this year and earlier this month warned inflation may hit 70%. The next monetary review is scheduled on Aug. 18.
The parliament this week voted to keep in place for a month measures set by President Ranil Wickremesinghe that in effect gives the army and police sweeping powers to to quell street protests.
