Colombo: Sri Lankans could be in for a long drawn-out path out of the economic misery as the cost of living crisis could grind on for years.
According to the medium-term inflation projections presented by the Central Bank together with the Finance Ministry to foreign creditors, Sri Lanka’s runaway inflation is going to stay at 29.5 per cent on average through 2023 before cooling to 6 per cent in 2024, the Daily Mirror reported on Tuesday.
However, political instability, social unrest and the time taken to activate the International Monetary Fund bailout package could determine how long Sri Lankans will have to put up with the spiralling prices and remain miserable.
Sri Lanka’s official headline inflation topped 70 per cent in August, with the food prices running at over 80 per cent.
The larger majority, which cannot put up with the pace of prices, “are either staying hungry or forgoing meals while the others board planes seeking better living conditions elsewhere, where at least their hard-earned money is shielded from the runaway prices”, the report said.
Two-thirds or more people in Sri Lanka are forgoing meals while 32 Sri Lankans go abroad every passing hour, it said.
The projections presented to the creditors also showed that the economy would continue to shrink in 2023, at 3 per cent levels, before recovering to an insignificant 1.5 per cent level in 2024. This level of growth is insufficient to create economic opportunities for the country’s workforce.
Sri Lanka’s unsustainable economic development, a large part of which happened since the end of the war in 2009, is on course to give up one-fifth of its size by next year.
The runaway prices in a continuously declining economy could be the most toxic combination that its citizens could wish for. “The Sri Lankans today are living that nightmare and it could last for several more years,” the daily said.