Sri Lanka continues to suffer as inflation rate tops 70% in August

Sri Lankans continued to suffer as data released by the government showed that inflation rates for the month of August reached a staggering 70.2%, reflecting spiralling costs, particularly of food and fuel, as the grapples with its worst economic crisis ever.

In March this year, the country of 22 million people was plunged into an economic and financial crisis following a crippling shortage of foreign exchange reserves.

Caused by years of fiscal mismanagement by the country's ruling elite, the situation was further exacerbated by Russia's invasion of Ukraine, which sent global fuel and food prices soaring.

The shortage of crucial foreign exchange has left the country unable to purchase essential commodities like food, fuel and medicine -- all of which it imports.

In August, the country's Central Bank said that it was expecting inflation to moderate, after reaching a peak of 70%. This came as official data showed that the country's economy contracted by as much 8.4% in the space of just three months, demonstrating just how deep of a recession Sri Lanka is in.

On Tuesday, India, which has provided its crisis-stricken neighbour with as much as US$ 4 billion in emergency credit lines in this year alone, said on Tuesday it had begun talks with Sri Lanka on restructuring its debt and promised to continue supporting the country, mainly through long-term investments.

Earlier this month, Sri Lanka and the International Monetary Fund (IMF) announced that they had reached a preliminary agreement for a loan of about $2.9 billion -- a development which many hope will help the country stir out of the crisis.