Image: Reuters Berita 24 English - Sujeewa Nelum Perera, a homemaker, is all too familiar with the hardship of feeding a family of four in S...
 |
| Image: Reuters |
Berita 24 English - Sujeewa Nelum Perera, a homemaker, is all too familiar with the hardship of feeding a family of four in Sri Lanka and has been forced to reduce the number of meals they consume due to record-high food prices. Her husband is unemployed.
Since the government has been limiting fuel supplies to just vital services due to the country's declining fuel reserves, Perera's husband, an autorickshaw driver, has been unable to earn a living for the past two weeks.
"For food, we require roughly Rs 2,000 ($5.50) each day. But since food prices rise daily, we can only afford roughly two meals "Perera, 38, spoke to Reuters while doing his grocery shopping in Kelaniya, a suburb nine kilometres (5.6 miles) from Colombo's commercial centre.
The worst financial crisis in decades contributed to Sri Lanka's 54.6 percent inflation rate in June, and according to experts, policymakers have limited options for bringing down prices in the near term.
The 22 million-person island is suffering from a serious foreign exchange deficit that has made it difficult for it to pay for the importation of basic goods like fuel, fertiliser, food, and medication and has led to protests from the populace.
After COVID-19 decimated the tourism-based economy and reduced remittances from foreign workers, the problem was exacerbated by the growth of enormous public debt, rising oil prices, and a prohibition on the import of chemical fertilisers last year that wreaked havoc on agriculture.
According to government data, food inflation rose to 80.1% year over year in June while transportation expenses increased by 128%.
According to a statement released by UNICEF earlier this month, 70 percent of households are now reporting lower food intake as a result of rising food prices.
According to Rehana Thowfeek, an economist who specialises in tracking food inflation, a household needs earn between Rs. 93,675 and Rs. 148,868 in order to follow the World Health Organization's recommendations for eating well.
However, according to government figures, Sri Lanka's average household income is only Rs. 76,414 per month, and the bottom 20% only make Rs. 17,572.
To make matters worse, the cost of the majority of vegetables has more than doubled, while the price of rice, a necessary basic, has climbed from Rs. 145 per kilogramme to Rs. 230.
Best to come
Sri Lanka is in discussions with the IMF about a potential $3 billion bailout, but it may be months before a programme is implemented.
According to analysts, inflation may reach its high in July but will then continue to average over 50% for the remainder of the year.
"In the later half of the year, we anticipate an IMF programme. However, even then, inflation will only be 10 to 15 percent "Around June 2023," said Dimantha Mathew, a First Capital Research analyst.
In order to control inflation and stabilise the currency, the central bank raised interest rates by a record 700 basis points in April. However, it is anticipated that rates will remain steady at the next policy statement on July 7.
There is nothing the central bank can do to control Sri Lanka's cost-push inflation, especially given the country's high gasoline prices, according to Mathew.
By eliminating pulses, fresh fish, and poultry from the family's diet in Kelaniya, Perera has been able to reduce expenses. Even for her 12-year-old daughter and eight-year-old son, milk has turned into a luxury good.
"Just plain too pricey. I now only cook eggs for the two kids. Both my hubby and I lack. We are assured that prices will continue to rise and the worst is yet to come. I have no idea how we will survive."
