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SRI LANKA: WHY DID DEFAULT TAKE PLACE IN THE COUNTRY?

... of daily power cuts, now reaching up to 10 hours a day. Inflation in March 2022 reached 18.7%. This is the highest figure in the last fourteen years (since November 2008). Experts expect that in May it could reach 28% due to rising commodity prices. Sri Lanka's external debt is estimated at $35 billion. The authorities call the current default the last opportunity to prevent further development of the financial situation according to the worst scenario.

74 countries are at risk of bankruptcy due to the pandemic

... governments have turned to private capital markets to finance their response measures to the pandemic. Only 42 countries received $12.7 billion in aid, according to the Paris Club, which helped to coordinate the project along with the IMF and the World Bank. Sri Lanka is the closest to bankruptcy, according to experts. S&P Global rating agency has recently warned of the country's risk of default in the very near future, downgrading its sovereign bond rating. The deepening financial and humanitarian crisis, caused by the loss of tourism and high government spending, the need for huge debt repayments to China, led to unprecedented inflation ...

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