Sri Lanka, also in the midst of a fuel crisis, defaults on its debt
Sri Lanka has, for the first time in its history, defaulted on its debts, as citizens and officials reckon with an "economic and political crisis" brought on by COVID-19 and the war in Ukraine, The Guardian reports Thursday.
The governor of Sri Lanka's central bank said the bank was now in a "preemptive default" after the deadline passed for making $78 million worth of payments to international creditors, The Guardian notes.
"Our position is very clear," central bank governor Nandalal Weerasinghe said Thursday: "Until there is a debt restructure, we cannot repay."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
A default occurs when a government is unable to repay some or all of its debt payments, and can have a damaging effect on a country's reputation, currency, and economy, BBC News notes.
Meanwhile, Sri Lanka is also dealing with a terrible fuel shortage, in which the prime minister said Monday that the government is unable to "find even $5 million to import gasoline," The New York Times reported.
Economists are concerned that Sri Lanka might be the first in a "wave of defaults," as other "low- and middle-income countries" contend with "runaway inflation and supply shocks," The Guardian writes.
For now, the country's central bank and government have begun working through a plan with the International Monetary Fund to "commence the external debt restructuring process," the central bank said.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
-
The week's best photos
In Pictures A flooded island, a ballistic missile, and more
By Anahi Valenzuela, The Week US Published
-
Who actually needs life insurance?
The Explainer If you have kids or are worried about passing on debt, the added security may be worth it
By Becca Stanek, The Week US Published
-
Sexual wellness trends to know, from products and therapies to retreats and hotels
The Week Recommends Talking about pleasure and sexual health is becoming less taboo
By Theara Coleman, The Week US Published
-
How would we know if World War Three had started?
Today's Big Question With conflicts in Ukraine, Middle East, Africa and Asia-Pacific, the 'spark' that could ignite all-out war 'already exists'
By Harriet Marsden, The Week UK Published
-
The issue of women and conscription
Under the radar Ukraine military adviser hints at widening draft to women, as other countries weigh defence options amid global insecurity
By Harriet Marsden, The Week UK Published
-
Ukraine's unconventional approach to reconstruction
Under the radar Digitally savvy nation uses popular app to file compensation claims, access funds and rebuild destroyed homes
By Harriet Marsden, The Week UK Published
-
Will Ukraine's leadership reset work?
Today's Big Question Zelenskyy hints at ousting of popular military chief, but risks backlash amid dwindling munitions, delayed funding and Russian bombardment
By Harriet Marsden, The Week UK Published
-
Imran Khan sentenced to 10 years: how powerful is Pakistan's military?
Today's Big Question The country's armed forces ignore country's economic woes, control its institutions and, critics say, engineer election results
By Harriet Marsden, The Week UK Published
-
What is Iran's endgame?
Today's Big Question Tehran seeks to supplant US and Saudi Arabia as dominant power in Middle East while forcing Israel to end Gaza war
By Harriet Marsden, The Week UK Published
-
Israel proposes two-month pause in Gaza war in exchange for all Hamas hostages
Speed Read Deal doesn't include an agreement to end war, but might be 'the only path that could lead to a ceasefire', said US officials
By Harriet Marsden, The Week UK Published
-
Nato official warns of all-out war with Russia in next 20 years
Speed Read Civilians must prepare for life-changing conflict and mass mobilisation, says military chief
By Harriet Marsden, The Week UK Published