Cash-strapped In May, Sri Lanka experienced its worst inflation rate on record for the eighth month in a row, according to government figures released Wednesday, as the island nation grapples with its worst-ever economic crisis.

According to the statistics department, the Colombo Consumer Price Index (CCPI) increased 39.1% year on year last month, up from 29.8% in April.

In April, food inflation in Colombo was 46.6 percent, increasing to 57.4 percent in May.
The price hikes in May did not completely reflect the steep increases in fuel prices, which is one of many essential items in short supply around the country.

Consumer prices are rising much faster than government records suggest, according to private economists, with one John Hopkins University analyst measuring March inflation at 133 percent — more than six times the national average.

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A significant foreign currency shortfall has hit Sri Lanka’s import-dependent economy, causing months of severe food, medicine, and other essential shortages.

Faced with a severe cash constraint, the government hiked taxes across the board on Tuesday, reversing President Gotabaya Rajapaksa’s November 2019 tax cuts.

Protests have been held outside the president’s oceanfront office for weeks, calling for his resignation due to the government’s mishandling of the problem.

Sri Lanka has defaulted on its $51 billion foreign debt and is seeking international assistance, particularly from the International Monetary Fund, to rebuild its insolvent economy.