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Sri Lanka inflation dips to lowest level since crisis

AFP . Colombo
29 Mar 2024 16:51:02 | Update: 29 Mar 2024 16:51:02
Sri Lanka inflation dips to lowest level since crisis
A vendor waits for customers at his vegetable stall at a main market in Colombo, Sri Lanka on February 10 – Collected Photo

Sri Lanka's statistics office said Friday that inflation had slowed to 0.9 per cent in March, the lowest year-on-year price increase since an unprecedented economic crisis.

The island nation defaulted on its $46 billion foreign debt in April 2022 after a foreign exchange wipe-out left it unable to import food, fuel and other essentials.

This month's inflation reading, from the benchmark Colombo Consumer Price Index, is a huge drop from the peak of nearly 70 per cent in September of that year.

The central bank this week cut its benchmark lending rate from 10 per cent to 9.5 per cent – the first reduction in four months – in a measure it said would boost "the on-going revival of economic activity."

Months of protests during the economic crisis led to the ouster of then-president Gotabaya Rajapaksa when demonstrators stormed his residence.

His successor Ranil Wickremesinghe has sharply raised taxes, cut energy subsidies and secured a $2.9 billion rescue package from the International Monetary Fund.

Both Wickremesinghe and the IMF have said the South Asian nation was "gradually" emerging from the crisis following the austerity measures.