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Sri Lanka

Nepotism, bad policy push Sri Lanka to brink of economic ruin

Some blame China's 'debt trap diplomacy' but reasons for crisis are legion

A demonstrator raises a placard as part of a protest against Sri Lankan President Gotabaya Rajapaksa in Colombo on April 23.   © Reuters

TOKYO -- Sri Lanka is on the brink of economic collapse, mired in its biggest financial crisis since independence in 1948.

Colombo, the commercial capital of the island nation of 22 million people, saw its inflation, as measured by the year-on-year change in the consumer price index, hit 29.8% in April, up from 18.7% in March. The nation's foreign exchange reserves, which totaled $7.6 billion at the end of 2019, have plunged to $1.8 billion, worsening shortages of imported fuel and medicine.

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