Home Business Sri Lankan’s Face Grim Future Amid Soaring Cost of Living

Sri Lankan’s Face Grim Future Amid Soaring Cost of Living

Sri Lankan’s Face Grim Future Amid Soaring Cost of Living
Source: The Guardian

“Cooking gas cylinder costs have nearly doubled, and we can no longer afford it,” Niluka Dilrukshi adds. The 31-year-old mother of four has always cooked using gas to feed her family, but now says she has no choice but to use firewood.

“My children used to have fish and veggies every day. We’re providing them one veggie and rice right now “she explains. “We used to eat three meals a day before, but now we can only afford two.”

Mrs. Dilrukshi and her family reside in a Sri Lankan neighborhood of Colombo. Her husband works as a day laborer, but the rising cost of necessities, notably food, has left them scrambling to make ends meet.

The price of a normal cooking gas cylinder has risen by about 85 percent in the last four months, from $7.50 to $13.25.

Sri Lanka, a 22-million-strong island nation, is experiencing unparalleled economic hardship. By the end of November, its foreign exchange reserves had plummeted to roughly $1.6 billion, just enough to cover a few weeks’ worth of imports.

As a result, the government has been compelled to impose import restrictions on a number of key commodities, including food, in a desperate attempt to preserve its important dollar reserves. This change, along with rising fuel and freight expenses, has driven up the cost of staples like milk powder and rice.

This significant increase in living costs is a global issue, not just in Sri Lanka. Several other Asian countries, such as India and Pakistan, are also experiencing high inflation, forcing people throughout the continent to tighten their belts to pay the cost of daily food and energy.

Sri Lanka is in a particularly bad predicament since it is a small island nation that relies heavily on foreign supplies to feed its population. The country’s small dairy sector, for example, is unable to match local demand, thus powdered milk is imported.

According to the government, its options are restricted.

“Due to the pandemic scenario, we had to impose import restrictions since the burden on our current account, as well as our trade imbalance, was mounting. We must, however, manage it as a responsible administration “A Sri Lankan minister, Shehan Semasinghe, tells reporters.

Meanwhile, rallies against growing living costs have been organized by the opposing party. “This has been brewing for quite some time. We’ve been living beyond our means for a long time. We’ve been consuming more energy than we’ve been generating “According to Harsha De Silva, a former minister of economic reforms and an opposition MP.

To quell public outrage over rising prices, the government recently offered a $1 billion relief package, which includes a wage and pension increase for government workers. It also reduced taxes on some foods and medicines while announcing economic assistance for the poorest residents.

With increasing global energy prices, the average cost of shipping a normal container from Europe to Asia has risen from roughly $2,000 in 2020 to more than $10,000 last year.

Unctad, a UN organization, recently warned that excessive freight charges are jeopardizing the global economy’s recovery. Small island nations like Sri Lanka, which rely on maritime supplies, are expected to be hurt severely by an increase in import prices, according to the report.

The growing cost of gasoline and electricity has had a cascading impact on wholesale rates, with carriers raising their fees. Last November, annual wholesale price-based inflation in neighboring India reached an all-time high of 14.2 percent.

In Pakistan, consumer price inflation hit 12.3 percent in December, the highest level in almost two years, with rising gasoline costs blamed for the increase in food and other commodities.

According to recent data from the Food and Agricultural Organization (FAO), the global food price index in 2021 averaged a 28 percent increase over the previous year.

“The high cost of inputs, persistent worldwide pandemic, and more unpredictable meteorological circumstances leave little space for hope, even in 2022,” writes FAO senior economist Abdolreza Abbassian.

Meanwhile, back in Colombo, residents like Mrs Dilrukshi, who is now living on the breadline, are concerned that if local costs continue to climb, it would be impossible to keep the fuel in their kitchens burning at all.