Govt. cautions of rising vehicle prices as import restrictions ease

Wednesday, 29 January 2025 00:40 - - {{hitsCtrl.values.hits}}

Cabinet Spokesman and Minister Dr. Nalinda Jayatissa affirms only three categories of vehicles are permitted to import at present
Anticipates surge in passenger vehicle imports as it may potentially impact on foreign reserves than expected
Asserts Govt. will observe effects of passenger vehicle imports before making further decisions
VIASL President Prasad Manage predicts automobile prices will rise due to rising demand, global supply chain disruptions, high cost of production and taxes involved

By Charumini de Silva

The Government yesterday hinted at a potential rise in vehicle prices as it moves gradually to ease the import restrictions that have been in place since March 2020.

Cabinet Spokesman and Minister Dr. Nalinda Jayatissa announced that the Government is carefully managing the reopening of vehicle imports to protect the country’s fragile fiscal stability.

“The Government is closely monitoring the foreign exchange outflows and State revenue inflows as we implement the policy to ease vehicle imports.

We anticipate that prices will likely increase due to rising demand, foreign exchange and revenue management efforts,” he said in response to a query posed at the weekly post-Cabinet meeting media briefing yesterday.

He affirmed that only three categories of vehicles are permitted for import at present and the third category or the passenger vehicles are set to be imported from next month.

“This category is expected to trigger a surge in vehicle imports, which the Government is preparing to monitor closely to assess the potential impact on foreign reserves and the overall economy than expected,” he added.

Dr. Jayatissa said to strike a balance, the Government has earmarked a foreign exchange outflow limit of $ 1.2 billion for vehicle imports. “This is the amount that the economy can handle at the moment. It is a balancing act between the State revenue generation and maintaining adequate foreign reserves — and it will all depend on the number of vehicles that will be imported particularly through the third category,” he explained.

The Cabinet Spokesman asserted that the Government will observe the effects of passenger vehicle imports before making further decisions. “For now, no additional categories of vehicles are being considered for import,” he added.

Separately, Vehicle Importers of Sri Lanka (VIASL) President Prasad Manage said industry predicts automobile prices are likely to increase due to rising demand, global supply chain disruptions, high cost of production and taxes involved.