By former minister Patali Champika Ranawaka

The fact that Sri Lanka is faced with its worst economic crisis in modern history is everybody’s knowledge today. Unfortunately, what is not perhaps anybody’s knowledge is how steep and rapid the downturn is, and the depths it is headed toward – for the latter would depend largely on the measures that would be adopted for containment and recovery. While the official statistics on the traditional indicators of the country’s economic performance during the second quarter of 2022, where the impact of the crisis was beginning to manifest in unprecedentedly dangerous proportions, remain yet to be released, an unmistakable indicator of the real economic performance namely electricity-demand reveals the dark reality.

Electricity being the chief energizer of the country’s economic engine, the demand for electricity stands as a highly representative and reliable indicator of economic activity. The correlation between electricity demand and economic growth is a well-established empirical relationship, and it is distinctively evident from the graph given in the figure-1 below which plots the two entities from 1997 onwards.