UK, Canada warn travellers as forex crisis affects Sri Lanka's tourism industry
- The economic situation in Sri Lanka is deteriorating, with shortages of basic needs such as medications, gasoline, and food
- Canada has encouraged its inhabitants to have food, water, and gasoline on hand in case of prolonged interruptions
- Tourism accounts for around 5% of Sri Lanka's GDP, with the largest markets being the United Kingdom, India, and China
Sri Lanka's continuous currency issue will worsen the island nation's tourist industry, as the United Kingdom and Canada have cautioned its visitors to be wary of the island nation's present economic predicament.
According to the most recent British government report, the economic situation in Sri Lanka is deteriorating, with shortages of basic needs such as medications, gasoline, and food due to a lack of foreign currency to pay for imports.
"Long lines may form at grocery shops, petrol stations, and pharmacies." "Local governments may implement electricity rationing, resulting in power disruptions," according to the advice.
Canada has also encouraged its inhabitants to have food, water, and gasoline on hand in case of prolonged interruptions, as well as to maintain an adequate quantity of medications on hand since they may not be accessible, and to keep an eye on local media for the latest developments.
After Russia and India, the United Kingdom is Sri Lanka's third-largest supplier of inbound tourists.
The number of foreign visitor arrivals in Sri Lanka fell by 70.8% in March 2020 compared to the previous year, since the tourism industry has been heavily damaged by the coronavirus epidemic.
The cautions came after the Sri Lankan government recently placed import limits on 367 commodities deemed "non-essential," such as milk products, fruits, and fish, in an effort to address the economic crisis caused by currency shortages.
Sri Lanka is experiencing its biggest foreign exchange crisis in history, owing to the COVID-19 epidemic, which has reduced the country's profits from tourism and remittances.
By December of last year, the reserves position had dwindled to less than one month's imports or slightly more than USD 1 billion.
The public has been experiencing a lack of numerous basics in recent months as a result of the foreign exchange crisis. Import limitations imposed to conserve money have jeopardised cooking gas and fuel supply, in addition to the imminent power outages.
In January, India pledged a USD 900 million loans to Sri Lanka to replenish the country's depleted foreign reserves and for food imports, despite the country's dearth of practically all vital goods.
In addition, New Delhi provided Colombo with a USD 400 million exchange deal to increase its reserves.
Meanwhile, a delegation from the International Monetary Fund (IMF) will arrive in the country for talks with the country's senior officials, following the government's announcement to float the rupee against the US dollar.
"Senior IMF staff is visiting Colombo on March 14-15 to brief President (Gotabaya) Rajapaksa on the outcome of the Article IV consultation, including the views expressed by the Executive Directors during the Board meeting held on February 25," said Masahiro Nozaki, the IMF mission chief in Sri Lanka.
Despite pressure from economists and opposition parties, the administration has refused to seek the IMF for a rescue package.