Sri Lanka on the brink of bankruptcy: Forex reserves close to zero

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- Corona hit tourism and tea exports, the main source of income

- Not only Sri Lanka but also Japan, Sudan Lebanon, Italy, Portugal can file for bankruptcy

- Greece is the world's first developed country to file for bankruptcy

Colombo: As the world watches over Afghanistan's economic situation today, one more of India's neighbors is on the verge of bankruptcy. Sri Lanka, south of India, is currently facing a foreign exchange crisis. The information was given by his finance minister Basil Rajapaksa to his country's parliament on Tuesday.

Sri Lanka relies heavily on tourism and tea exports. The spread of the coronavirus has hit its economy hard.

In addition to the foreign exchange crisis, Sri Lanka's revenue has been declining while spending has been steadily rising. The Sri Lankan government has borne 50 per cent of the cost of the vaccine.

"According to the central bank's data, our country currently has close to zero forex reserves," he said. Rajapaksa said that as a result of the Corona epidemic, the government's coffers have fallen by an estimated Rs 1,200 billion to Rs 1,200 billion in the current year.

Sri Lanka's economy is mainly dependent on tourism and tea exports, but the business has come to a standstill due to sanctions imposed by the corona, the finance minister said.

Agricultural production in Sri Lanka has also been affected, forcing it to import heavily.

If we look at the history of bankruptcy of countries, Argentina, Russia and Lebanon have gone bankrupt in recent decades. Last year, Argentina filed for bankruptcy against Ecuador and Lebanon against their debt burden. Apart from this, the top ten countries likely to file for bankruptcy this year include Japan, Greece, Lebanon, Italy, Portugal, Jamaica, Cabo Verde, Mozambique, Eritrea and Yemen. This is because the debt burden on them is much higher than the GDP. Japan 3%, Sudan 200%, Greece 15%, Lebanon 14.50%, Italy 12%, Portugal 120.50%, Jamaica 17.10%, Cabo Verde 17.50%, Mozambique 121.50%, E.R. , 119.10 percent of Yemen. Canada has 2.50 per cent, the UK 2.50 per cent and the US 2.50 per cent. Japan's debt-to-GDP ratio exceeded 100 per cent in 190, compared to 200 per cent in 2010. It thus became the first developed economy to cross the GDP-to-date ratio of 200 per cent. Greece was the first country in the world to file for bankruptcy. He had filed for bankruptcy in 2013.

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