During the 2010s, Sri Lanka had some of the
Things took a 180-degree flip on the finish of the last decade as the rustic’s economic system stumbled. In May 2022, the federal government defaulted on its debt for the primary time in historical past.
As inflation persisted to spiral out of keep an eye on, with a large scarcity of meals, gasoline and medication for the rustic’s 22 million other people, Sri Lankans took to the road, forcing the president, Gotabaya Rajapaksa, to renounce and flee the rustic.
Even regardless that Sri Lanka has a brand new president, Ranil Wickremesinghe, protests proceed. Inflation has risen previous 50% —
Many professionals imagine that Sri Lanka’s tale is a serious warning call for rising markets.
“Sri Lanka is dealing with its worst financial cave in in its fashionable historical past,” stated Sumudu W. Watugala, assistant professor of finance on the Kelley School of Business at Indiana University. “This is because of long-standing structural weaknesses exacerbated via a sequence of idiosyncratic shocks. Sri Lanka’s disaster is usually a serious warning call to different growing international locations as a result of it is a vintage rising marketplace disaster in some ways.”
So what does Sri Lanka’s financial disaster sign about an identical economies and rising markets? Watch the video to be told about extra dangers all in favour of rising markets, how Sri Lanka’s economic system collapsed and the rustic’s trail ahead.
Source Link: https://www.cnbc.com/2022/08/13/how-sri-lankas-economic-collapse-raises-alarm-bells-for-other-emerging-markets.html