Abstract
In July 2022, Sri Lanka officially declared national bankruptcy. The bankruptcy seems to result from the outbreak of COVID. In fact, Sri Lanka's economic structure was already very fragile. In March of the same year, the United states opened the most substantial and dense cycle of interest rate hikes since 1981, which quickly led to a global spike in the cost of funds, disrupting the order of global financial markets and directly exacerbating the risk of a debt crisis in Sri Lanka. With the internal and external combined impact, the economic crisis expanded into a food crisis, debt crisis, and went bankruptcy step by step. Nowadays the current global economy is in a recessionary stage. Sri Lanka is the first country to fall, but not the last one. Other emerging market countries are facing the same problem. This paper combs through the process of Sri Lanka's national bankruptcy, deeply analysing the reasons for its bankruptcy and the pulse of its economic operation, and tries to put forward some useful suggestions and insights.
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