According to official numbers released on Friday, inflation in Sri Lanka’s crisis-stricken nation fell to 4.0 percent in August, the lowest level since before last year’s extraordinary financial catastrophe.
The island country suffered from food, gasoline, and medical shortages for months as a result of a foreign exchange crisis that led to massive unrest and the president’s removal.
However, since the crisis’ climax in September of last year, headline inflation has decreased from 69.8 percent to 6.3 percent, signaling the end of the crisis.
The medium-term trend of the figure is expected to go lower, according to Sri Lanka’s central bank.
Last year, the nation fell behind on its $46 billion in foreign debt; nevertheless, in March, it was granted a four-year, $2.9 billion rescue by the International Monetary Fund.
This month, an IMF delegation is scheduled to visit Colombo to assess Sri Lanka’s financial recovery efforts and make a decision about the release of a new $330 million loan tranche.
The world’s last resort lender acknowledged that there were “tentative signs of improvement” in Sri Lanka’s economy but cautioned that more difficult measures were still required.
Due to months of social turmoil brought on by the economic crisis last year, Gotabaya Rajapaksa, the then-president, was overthrown after a mob of demonstrators invaded his residence.
To increase state revenue, his successor Ranil Wickremesinghe has hiked taxes, eliminated significant energy subsidies, and sharply increased prices.
With effect from Friday, the government increased the price of gasoline and diesel fuel by up to 11.2 percent.
