The South Asian nation, Sri Lanka, is facing severe shortages of food, fuel, power supply and other essentials. Sri Lanka is negotiating with the International Monetary Fund (IMF) for a bailout (helping them sustain). This situation in Sri Lanka is called recision.

What is recession?

Recession is a temporary period of economic decline during which trade and industrial activities are reduced.

What are the reasons for the recession in Sri Lanka?

Many factors have collectively led to this situation. In their national elections in 2019, the current government had made several promises and provided freebies to people. With this, the tax income of the government went down. Read more about government revenues and taxes. Due to COVID-19,

• The tourism industry and exports from Sri Lanka got severely impacted.
• This led to a shortage of foreign currency in Sri Lanka.
• The Sri Lankan rupee has fallen by 60%.
• More foreign currency is required to purchase food, fuel and oil etc.

While the government looked pro-people with freebies and subsidized expenditure, they could not sustain the economy.

Current Sri Lankan Crisis

People are holding President Gotbaya Rajapaksa responsible for the economic meltdown. Now, the government is unable to pay for the essential imports which include fuels like petrol and diesel.

1. Sri Lanka President Gotbaya Rajapaksa declared an emergency in the country.
2. Majority of the ministers have resigned.
3. The President has asked opposition parties also to join the government. The opposition has refused.
4. Sril Lanka has also declared health emergency. There is severe drug crisis.
5. People are making protests. The social media platforms like Facebook, WhatsApp, Twitter and YouTube were blocked. These curbs were lifted in the second half of Sunday.

The IMF (International Monetary Fund) released a report which stated that public debts in Sri Lanka had increased to unsustainable levels. Also, the foreign exchange reserves were insufficient to pay the debts. The country faces debt repayment of around $4 billion in 2022.

India helping Sri Lanka

Sri Lanka has sought help from India in times of emergency. A diesel shipment from India has reached Sri Lanka on Saturday. Adding to it, India has signed a $1 billion credit with Sri Lanka for importing essential goods which include food and medicine.

Curious Times is a leading newspaper and website for kids. We publish daily global news aligned to your learning levels (also as per NEP 2020): Foundational, Preparatory (Primary), Middle and Senior. So, check out the News tab for this. We bring kids’ favourite Curious Times Weekly newspaper every weekend with top news, feature stories and kids’ contributions. Also, check out daily JokesPoke, Tongue Twisters, Word of the Day and Quote of the Day, kids need it all the time.

Curious Times News Program for Schools for FREE. Over 5,000 schools and teachers from all over the world have joined our programme so that students and teachers can get FREE Educative Newspaper. Here, kids can take part in world events and win prizes and certificates for free through their schools.

Moreover, schools are sharing important School News, like interviews with the principal, notices about new students, contests, and results, not just on social media but also on a news website for kids and other schools.

Thus, do not wait any further, sign-up for your school for FREE. 

The following social media platforms allow you to communicate with us: WhatsApp, Instagram, Facebook, Youtube, Twitter, and LinkedIn.

  0  (Please login to give a Curious Clap to your friend.)

To post your comment Login/Signup