Ballooned state sector propped up with money printing

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Expansion of the state sector without a proper plan has been identified as one of the key factors that have contributed to the current economic crisis. When Prime Minister Ranil Wickramasinha said that Sri Lanka’s crisis is of its own making, he was very correct.

Sri Lanka has expanded state workers by eleven percent from 2014 to 2021 and on top of that cost-cutting was abandoned.
This not only expanded public expenditure but also gave an opportunity for politicians to increase the number of government appointments made on their recommendations

Expansion :
The state worker cadre has expanded from 1.37 million to 1.49 million in 2021.\

Government teaching services have become a place to absorb unemployed graduates. Since 2004 about 50,000 graduates of been given teaching appointments.

On the other hand it could be argued that if these graduates were not absorbed to the workforce, it could have led the country on to the path of social unrest.

In 2021, state workers took home 86 cents of every tax rupee home as salaries and pensions.

Sri Lanka is now printing money to pay state worker salaries, as it has not been able to come up with any other viable alternative.

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