The Sri Lankan Economic Crisis – What Went Wrong?



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Code : ECC0062

Year :
2022

Industry :-

Region : Asia

Teaching Note: Available

Structured Assignment : Not Available

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Abstract: The case describes the Sri Lankan Economic Crisis in the year 2022 and analyzes the reasons for it with the help of internal and external macro-economic variables which include fiscal deficit, trade deficit, external shocks such as bomb blasts, the COVID 19 pandemic, and the Russia-Ukraine war. It also looks at the effect of these variables on the economic conditions prevailing in the country such as twin deficits, shortage of goods, high, inflation, fall in foreign reserves etc.


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Pedagogical Objectives:

  • Understanding the reasons for the economic crisis
  • Understanding the problems of Current Account Deficit and how is it related to Trade Deficit and the effect of Trade Deficit on the economy with reference to Sri Lanka
  • Understanding the Capital Account Deficit and how it is related to Fiscal Deficit and the effect of Fiscal Deficit on the economy with reference to Sri Lanka.
  • Understanding Balance of Trade (BoT) and Balance of Payment crises and their impact on the economy with reference to Sri Lanka and the lessons India can learn.


    Keywords : Current Account; Capital Account; Financial Account; Fiscal Deficit; Trade Deficit; Balance of Trade; Balance of Payments; Debt Default; Foreign Exchange Reserves; High Inflation; Unemployment; Shortage of Goods; Balance of Payments Crisis

    Contents :
    » Introduction
    » Fiscal / Budget Deficit and Debt
    » Balance of Trade - Current Account Deficit
    » Effect of Import Policy Measures on Sri Lankan Economy
    » The Effect of External Shocks on Sri Lankan Economy
    » Exhibits


    Introduction >>


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