ECONOMYNEXT – Sri Lanka’s imports surged to 2.2 billion US dollars in December 2022 from around 1.6 to 1.7 billion US dollars in earlier months, while full year imports rose to 20.6 billion dollars, higher than the 19.9 billion US dollars in the pre-pandemic 2019.
In December imports rose 46.8 percent to 2.2 billion US dollars, exports rose 19 percent to 1.15 billion US dollars. There were also an estimated 120 million dollars of tourism revenues, which would also boost imports.
Exports in the 12-month to December 2021 were up 24 percent to 12.5 billion dollars
In the 12 months to December imports rose 28.5 percent to 20.6 billion US dollars as exports and credit recovered from pandemic lockdowns.
The trade deficit expanded to 8.1 billion dollars from 6.0 billion US dollars.
Sri Lanka curtailed imports, in a severe Mercantilist knee jerk reaction as money printing created forex shortages.
Imports surged despite vehicle imports, a perennial target of Mercantilists running the country coming down to 12.8 million US dollars, down from 815.7 million dollars in the pre-pandemic year of 2019.
Sri Lanka banned a series of goods which are disliked by bureaucrats but printed large volumes of money to keep interest rates down and boost investments.
Loans at 7.0 percent interest were given to housing.
Machinery and equipment imports rose to 2.8 billion dollars from 2.1 billion dollars a year earlier and 2.4 billion US dollars in 2019.
Building materials rose to 1.2 billion dollars from 1.0 billion a year earlier, though down form 1.5 billion in 2019.
Total capital goods imports were 4.4 billion US dollars up from 3.5 billion a year earlier. Some may be from fully financed foreign funded projects.
Food and beverages imports were 1.5 billion US dollars up from 1.55 billion dollars a year earlier.
Dairy imports were down 4.8 percent to 317 million US dollars, in a move that is likely to warm the cockles of Sri Lanka’s economic nationalists and so-called import substitution cronies, observers say.
However the fall in the car imports or milk had failed to reduce the countries balance of payments deficit or the trade deficit, which is driven by services incomes, foreign borrowings as well as money printing if there is any.