Explained: How Sri Lanka fell into its worst economic crisis & what’s next

The Sri Lanka economic crisis that has never happened before is only getting deeper in recent months, which comes from wrong government finances that manage and cut tax that are not on time other than the impact of Pandemi Covid.

Decreased forex reserves, large piles of debt, currency devaluation, increased inflation and the falling economy have forced people to fight for goods with basic needs as well.

After weeks of anti-government protests, Mahinda Rajapaksa resigned from the position of Prime Minister, earlier this week.

Most of the public anger has been directed at Mahinda and his brother Gotabaya Rajapaksa – who is the president of the island country – because he leads the country into the economic crisis.

How the crisis worsens

Crisis – The worst since Sri Lanka’s independence from England in 1948 – was partly caused by a lack of foreign currency. This means that the state is unable to pay for imports of staple food and fuel.

As a result, the country’s inability to pay for goods -the basic needs cause acute deficiencies and encourage prices to record the highest.

Critics say the crisis root lies in economic management errors by the government in a row that creates and maintains the twin deficit – lack of budget in addition to the current account deficit.