Sri Lanka Inflation Rate Hit 59%

The inflation rate in Sri Lanka rose in June by 58.9% compared to 45.3% in May.

The Sri Lankan Daily Mirror reported that prices, as measured by the National Consumer Price Index (NCPI), have been recording new highs every month since the beginning of this year after already high global commodity prices collided with Russia's intervention in Ukraine, driving up global energy and commodity prices.

The central bank predicted two weeks ago that inflation could accelerate further to 70 percent in the near future, thus raising borrowing rates by 100 basis points to increase control over demand to the level of available supply as they have no direct control over the latter, which is mostly caused by external factors.

Also reflecting the central bank's concern about future inflation, monthly rates as measured by the NCPI accelerated to 10.9% in June from 9.7% in May from the previous month.

The monthly prices usually provide the direction in which future prices could be headed, but the month of June did not provide any indications as to whether they had peaked or started to decline. The new Sri Lankan Cabinet was sworn in on Friday before President Ranil Wickremesinghe at the Prime Minister's Office.

This comes after Ranil Wickremesinghe was sworn in as President of Sri Lanka on Thursday, after winning a vote in Parliament yesterday. Sri Lankan Parliament Speaker Mahinda Yapa Abhiwardena announced Friday the formal resignation of Gotabaya Rajapaksa as Sri Lankan President, while Prime Minister Ranil Wickremesinghe was sworn in as Acting President.

Two weeks ago, thousands of protesters stormed the presidential headquarters in Fort, amid cheers and applause, after President Gotabaya Rajapaksa fled, so that both the president's house and the presidential secretariat were seized by the demonstrators.

Sri Lanka is going through the biggest economic crisis in its history, with debts amounting to more than 50 billion US dollars and bankruptcy is imminent, this comes while fuel is scarce in many gas stations and medicines are scarce.