'No dollars to pay': Sri Lanka continues to snub vehicle imports
- Sri Lanka had banned vehicle imports previously as its dwindling economy tries to get back on its feet.
Cash-strapped Sri Lanka is taking small steps to come out of what has been tumultuous past several months of economic crisis. The country has been in the midst of extremely high inflation and foreign-exchange reserves have been at record lows. At a time when prices of essential items have skyrocketed, buying a car has obviously become an exercise in absolute opulence.
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Sri Lanka largely imports all vehicles as there is very limited local manufacturing in the country. But to battle the ongoing economic crisis, import of various items - including vehicles - had been banned. And even though some of the items from the banned list were removed earlier last week, shipment of foreign-made vehicles will remain a strict no.
The country's Minister of Finance - Ranjith Siyambalapitiya, had previously hinted the government may allow vehicle imports. But around $80 million was spent on importing fuel alone in the last week, which led to a rethink. "If USD 75-80 million could make such an impact, then we need to closely consider the impact when vehicle imports are allowed as they consume a large volume of dollars," he was quoted as saying. “As a country, we are trying to recover from a huge economic crisis. Therefore, instead of taking decisions based only on the outer surface, we should examine all the aspects and explore deeply the impact on the entire economy."
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Sri Lanka's economy has shrunk by 11.5 per cent in the first quarter of 2023 from the previous year, as per government data. In March, the country managed to get a USD 3 billion bailout package from the International Monetary Fund (IMF). The priority, however, remains on essentials.
The country's economy is heavily dependent on tourism, rice production, tea exports and textile. But transportation costs have increased manifold owing to high fuel prices as well as shortage of options. Even individual customers are facing the brunt as they have to wait in long lines to get fuel for their vehicles. Prices of second-hand vehicles have often shot past asking prices of residential properties.
