![‘There's no money left': Covid crisis leaves Sri Lanka on the brink of bankruptcy](https://cdn.magzter.com/1588175106/1641169685/articles/61d2b049b2928/Theres-no-money-left-Covid-crisis-leaves-Sri-Lanka-on-the-brink-of-bankruptcy.jpg)
Sri Lanka is facing a deepening financial and humanitarian crisis, with fears, it could go bankrupt in 2022 as inflation rises to record levels, food prices rocket and its coffers run dry .
The World Bank estimates 500,000 people have fallen below the poverty line since the beginning of the Covid pandemic, the equivalent of five years ’ progress in fighting poverty.
Inflation hit a record high of 12.1% in December and escalating prices have left those who were previously well off struggling to feed their families, with basic goods unaffordable for many. After president Gotabaya Rajapaksa declared Sri Lanka to be in an economic emergency, the military was given power to ensure essential items, including rice and sugar, were sold at set government prices – but it has done little to ease people’s woes.
He described how his village grocer was opening 1kg packets of milk powder and dividing it into packs of 100 g because customers could not afford the whole packet. “We now buy 100g of beans when we used to buy 1kg for the week,” said Paranagama.
The loss of jobs and vital foreign revenue from tourism, which usually contributes more than 10% of GDP, has been substantial, with more than 200,000 people losing their livelihoods in the travel and tourism sectors, according to the World Travel and Tourism Council.
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