Srilanka is facing its first sovereign debt default. This south Asian country got independence in 1948 from the British empire. But recently the nation is facing inflation shortages of food and lengthy power cuts which became the cause of toppling the government. The backbone of the economy of Sri Lanka was her tourism industry. The spreading of covid 19 in the world collapsed the only strong part of the economy of Sri Lanka. In short, Sri Lanka is in turmoil waiting for international aid. The value of the Sri Lankan rupee has weakened to 360 to the US dollar. This made the imports more difficult and prohibitive. There are only $25 million in usable foreign reserves, said the finance minister of the economically defaulted country.
Sri Lanka is not the only country that is suffering economic turmoil. Other countries in the world are on the brink of economic default. Some of the countries are mentioned below along with their reasons.
Some of the countries that are on the brink of default are Lebanon, Sri Lanka, Russia, Suriname and Zambia, and dozens more that are in the danger zone as rising borrowing costs, inflation and debt all stoke fears of economic collapse.
Most of the grain import in the world is done by Ukraine. The middle east and the Africans are its customers. With this Ukraine generates enough revenue. But the invasion of Russia in Ukraine affected its economy. Seaports are occupied from where the trade mostly happens by the Russians. This has bent the Ukrainian economy on the brink of default.
Pakistan is taking help from the IMF to give support to its weakening economy day by day. These loans have affected the prices of basic commodities of life. The high inflation rate, shortages of fuel, and energy crisis have put the country in turmoil. It seems that the nation is standing on the brink of default. Foreign reserves are as low as 8.8 billion which is hardly enough for five weeks of imports.
Belarus is a neighbouring country of Russia. Belarus is also on the brink of default due to its support of Russia. Belarus, like Russia, is under sanctions. Keep in mind that Russia attacked Ukraine at the start of this year. Due to this, world-leading countries have taken action not to make any imports or exports.
Two years ago the Latin American country defaulted but it has been rocked back into crisis by violent protests. This protest was targeted by the public to get rid of their president named Guillermo Lasso.
Addis Ababa plans to be one of the first countries to get debt relief under the G20 Common Framework program. Progress has been held up by the country’s ongoing civil war though in the meantime it continues to service its sole $1 billion international bond.