Debt Crisis and National Bankruptcy: Evidence from Sri Lanka

On May 19th this year, the central bank governor of Sri Lanka confirmed that country could not repay its national debt due on April 18th in time (Jayasinghe & Pal, 2022). For first time, had defaulted sovereign since independence from Britain 1948. It also announced inability to continue paying for fuel July 6th, declared bankruptcy (Athas et al., This paper examined what led Lankan crisis and subsequent how save itself situation. analyzed secondary data various published sources like news articles, journal websites, books. The study found high levels external outrun revenue. depends highly imports supply goods into market. Its was influenced by economic shocks Russian-Ukraine war Covid-19 pandemic, which impaled production. Furthermore, country's regulations were poor, making it unable establish effective taxation, debt, foreign reserve management systems. company improve conditions getting assistance other countries IMF short term. Moreover, needs restructure reserves borrowings