Inflation in Sri Lanka reaches record levels of 14%

Inflation in Sri Lanka reaches record levels of 14%

Official figures showed on Saturday, Sri Lanka’s consumer prices show a new high of 14 percent in December. The current high surpassed the previous high of 11.1 percent from a month earlier as food and fuel charges are worsening in the country.

According to the Census and Statistics Department, the National Consumer Price Index (NCPI) for December, year-on-year inflation reached its highest level since the index was established in 2015. Food inflation has seen a new record high of 21.5 percent which is up from 16.9 percent in November and 7.5 percent a year ago. Vegetables and fruits crop yields have sharply been reduced due to the use of substandard organic fertilizer and pesticides.

Ministers in the parliament warned earlier this week of a growing food crisis after the government banned imports of agrochemicals last year, which led to farmers abandoning more than 30% of farmland. The government had lifted its agrochemical import ban in October after the intense farmer protest. However, the banks are yet short with dollars to finance imports.

Due to the pandemic, the island’s tourism-dependent economy has been negatively impacted, with the government imposing broad import restrictions to avert a currency crisis, resulting in a shortage of essential items.