Sri Lanka's $1 Billion Vehicle Import Plan: Balancing Act Ahead

COLOMBO (News 1st); The Sri Lankan government is set to lift the ban on vehicle imports starting from the first of next month. 

The import restrictions, including those on vehicles, were initially imposed on March 1, 2020, due to the economic crisis at the time. 

However, with the economy gradually improving and the need to stimulate economic activity, the government has decided to allow vehicle imports once again.

There are concerns about the potential impact on the country's financial reserves. 

Governor of the Central Bank of Sri Lanka Dr. Nandalal Weerasinghe emphasized the importance of managing the import volume to avoid depleting reserves. He noted that while vehicles are necessary for the country, it is crucial to balance this need with the goal of building up financial reserves.

The Central Bank has projected that approximately $1 billion will be spent on vehicle imports this year. 

Dr. Weerasinghe assured that this expenditure would not hinder the growth of financial reserves, provided it is managed carefully. The Ministry of Finance will determine the appropriate tax policies and revenue strategies to accommodate this decision.

Regarding the affordability of new vehicles for the general public, Dr. Weerasinghe cautioned that a sudden influx of vehicle imports could lead to increased demand and higher prices. He stressed the importance of a gradual and controlled approach to ensure that vehicle prices remain within reach for the average consumer.

While the decision to lift the import ban has been made, final decisions on related taxes and other details are still pending.