Since January, inflation has skyrocketed and commodity prices have risen to unprecedented levels. There were already warning signs before the pandemic and the government crisis: between 2019 and 2020 the poverty rate went from 11.3% to 12.7%. Thousands of citizens expect to receive subsidies.
Colombo () – There are 2.7 million Sri Lankans living in poverty due to the economic crisis, a figure never seen in the country’s history. Inflation has skyrocketed since January and commodity prices have risen to unprecedented levels. A World Bank report (“Sri Lanka Development Update”, published every six months) shows that “the poverty rate in Sri Lanka has doubled from 13.1% to 25.6% ($3.65 per capita, purchasing power parity 2017) between 2021 and 2022 and in cities it has tripled, going from 5% to 15% Mullaitivu district is the poorest area (57% poor in 2022), followed by those of Kilinochchi and Nuwara Eliya.
This week Shehan Semasinghe, Finance Minister and member of the Sri Lanka Podu Jana Peramuna (SLPP), called on hundreds of thousands of poor people to register with the Welfare Benefits Board for help. According to government officials, 867,696 Sri Lankans (of whom 117,101 are elderly) are waiting to receive social benefits: 21,459 are waiting for disability allowance and 2,687 people are chronically ill and need social assistance. However, commentators claim that the ministry in question and its politicized staff “have a reputation for not fully utilizing funds for allocated purposes.”
“That means there are more Sri Lankans who have fallen into the ranks of the helpless and hopeless,” a public official told . Data from the Central Bank (CBSL) show that there are already 1.76 million families benefiting from the Samurdhi program (aid program, through which the World Bank has granted emergency subsidies). In 2021, 55.4 billion rupees (about 156 million euros) had been delivered.
A senior CBSL official revealed that “after racking up unsustainable debts and due to the sky-high levels of corruption that strangled the economy during the Rajapaksa rule, Sri Lanka’s economic collapse began long before the Covid-19 pandemic: the rate of poverty went from 11.3% in 2019 to 12.7% in 2020”, the year in which the “new poor” were 300 thousand.
Economic analysts believe that “Sri Lanka has to increase employment in industry and services and recover the real value of income to mitigate the impact of the crisis.” A coordinated approach is required to support the poor and vulnerable.
According to forecasts, the national GDP will decrease by 9.2% this year and a further 4.2% in 2023, but it is assumed that there may be a “recovery” the following year. Foreign exchange reserves amounted to approximately 300 million dollars (309 million euros), while foreign assets in August this year were negative by 2,030 million dollars (2,100 million euros).
