May 20, 2022: According to a report by Reuters, Sri Lanka’s prime minister has warned of a food shortage as the island nation battles a devastating economic crisis and vowed the government will buy enough fertiliser for the next planting season to boost productivity.
A decision in April last year by President Gotabaya Rajapaksa to ban all chemical fertilisers drastically cut yields and although the government has reversed the ban, no substantial imports have yet taken place.
“While there may not be time to obtain fertiliser for this Yala (May-August) season, steps are being taken to ensure adequate stocks for the Maha (September-March) season,” Prime Minister Ranil Wickremesinghe said in a message on Twitter late on Thursday.
“I sincerely urge everyone to accept the gravity of the … situation.”
Sri Lanka is facing a dire shortage of foreign exchange, fuel and medicines, and economic activity has slowed to a crawl.
Inflation could rise further to a staggering 40% in the next couple of months but it was being driven largely by supply-side pressures and measures by the bank and government were already reining in demand-side inflation, the governor added.
Inflation hit 29.8% in April with food prices up 46.6% year-on-year.
As anger against the government spread, police fired tear gas and water canon to push back hundreds of student protesters in Colombo on Thursday.
The protesters are demanding the ouster of the president as well as the prime minister.
Sri Lanka’s economic crisis has come from the confluence of the COVID-19 pandemic battering the tourism-reliant economy, rising oil prices and populist tax cuts by the government of President Rajapaksa and his brother, Mahinda, who resigned as prime minister last week.
Meanwhile, Wickremesinghe, appointed prime minister in his place, is accused of a being a stooge of the brothers.
P. Nandalal Weerasinghe, the central bank chief, has said plans for a debt restructuring were almost finalised and he would be submitting a proposal to the cabinet soon. “We are in pre-emptive default,” he said.
A spokesperson for the International Monetary Fund said the fund was monitoring developments very closely and that a virtual mission to Sri Lanka was expected to conclude technical talks on a potential loan program to country on May 24.
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