Inflation

With vegetable inflation exceeding 40 per cent, consumers face the brunt of soaring costs, while weak market monitoring and governance exacerbate the issue.

Sri Lanka’s central bank embraced deflationary measures that allowed currency appreciation and restored external stability. Critics argue, however, that these gains may be short-lived without structural reforms and tighter inflation targets.

The global economic growth is driven by strong economic activity in India, alongside recoveries in Pakistan, Bhutan, Nepal, and Sri Lanka.

The SCL Act, which covers 63 items, imposes taxes at high rates on staple foods such as rice, potatoes, and maize. Critics argue that while these taxes protect domestic agriculture, they also make basic foods costly, exacerbating malnutrition among poor families.

Highlighting positive economic indicators, the Prime Minister noted that the reduction in the policy rate would provide much-needed relief to businesses and investors.

Trade-driven diversity also leads to a more equal distribution of nutrients such as vitamin C, calcium, and zinc, which is key given that the domestic food production of many countries does not meet the nutrient requirements of their populations.

Despite the political transition, Sri Lanka has maintained its economic policies, providing reassurance to investors. Analysts suggest the stability and anti-corruption stance of the new government could further bolster investor confidence.

Nepal’s debt trajectory aligns with global trends among developing nations, which have seen rising public debt due to post-pandemic recovery efforts, inflationary pressures, and currency devaluations.