Why did Sri Lanka go bankrupt

The reason is that the national economy has grown slowly in the past decade.

One of the main reasons why Sri Lanka is on the verge of bankruptcy is the country's slow economic growth in the past decade, with an average annual growth rate of less than 4%. Government finance and foreign trade have been in twin deficits for a long time, and it needs to borrow money to survive. By 2 19, foreign debt had accounted for 42.6% of its GDP. Standard & Poor's, Moody's and Fitch all upgraded their credit ratings from B to C, which made it difficult for them to raise funds from the international market. The second is high inflation, and now Sri Lanka's domestic inflation rate is double digits.

At present, Sri Lanka's largest creditor is China (US$ 500 million). Unless some foreign debts due this year can be forgiven, Sri Lanka will really go bankrupt.