Sri Lanka is flirting with default

ALMOST THREE years since terrorists blew up hotels along Colombo’s lovely beaches and two years since covid-19 shut down international travel, tourists have begun returning to Sri Lanka, providing sorely needed foreign exchange. The country’s stockmarket has been bounding along, up by more than 80% in 2021, trailing only commodity-rich Mongolia among global bourses. Corporate profits have been strong, too. GDP growth last year was somewhere between 3.5% (by private estimates) and 5% (by the government’s). This suggests a thriving economy. Yet alarm bells are clanging.