Inflation eases sharply in bankrupt Sri Lanka – Times of India

Colombo: Sri Lanka’s inflation eased to 12 per cent in June, the lowest figure since the unprecedented economic crisis hit the island nation last year, official data showed on Saturday.
Sri Lanka defaulted on its $46 billion foreign debt repayments in April 2022 and the public faced several months of food, fuel and medicine shortages.
The crisis has eased since the government received $2.9 billion in bailout funds from the International Monetary Fund in March.
June inflation was the lowest since the 9.9 per cent figure recorded in November 2021.
This is down from 25.2 per cent in May and a peak of 69.8 per cent in September.
“Inflation is expected to reach single digit levels by the beginning of the third quarter of 2023,” the Central Bank of Sri Lanka said.
This week, the government unveiled a debt restructuring plan, offering a 30 percent cut for international sovereign bondholders, who account for more than a quarter of Sri Lanka’s outstanding foreign obligations.
The IMF said last month that Sri Lanka’s economy Showed “temporary signs of improvement” but warned Colombo still needed to pursue painful reforms.
The previous year’s economic crisis led to several months of civil unrest, which ultimately led to the ouster of then-President Gotabaya Rajapaksa.
his successor Ranil Wickremesinghe has doubled taxes, removed generous subsidies on energy and sharply increased prices to bolster state revenues.