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Colombo (Reuters) – Sri Lanka’s finance ministry announced on Saturday that it was lifting import restrictions on nearly 300 items with immediate effect, in a clear sign that the island nation is slowly but surely emerging from its worst economic crisis in decades.
Last year, Sri Lanka slid into its worst economic crisis since its independence in 1948 due to a drop in foreign exchange reserves that caused severe shortages of basic items and sparked massive public protests.
In April 2022, Sri Lanka announced its inability to pay its international debt due to the forex crisis.
The economic situation in Sri Lanka It got better after it got a $3 billion rescue package from the International Monetary Fund (IMF) in March.
The IMF’s lifeline has helped Sri Lanka boost its foreign exchange reserves and stabilize soaring inflation.
“With the stabilization of the economy, import restrictions were lifted on 286 commodities, starting Friday midnight,” the Finance Ministry said in a statement.
“Restrictions will continue on 928 items, including imports of cars, that were banned in March 2020,” the statement said.
“Imported goods can help moderate prices by providing consumers with low-cost options and alternatives,” said Sheehan Simasinghe, Minister of State for Finance.
In August last year, Sri Lanka imposed a ban on the import of 300 consumer items such as chocolates, perfumes and shampoos to address its economic problems.
Sri Lanka’s reserves grew by a staggering 26 percent to $722 million in May, while the currency has also gained 24 percent this year, according to central bank data.
Despite the positive signs, Sri Lanka’s road to full economic recovery remains arduous.
The country needs to complete debt restructuring talks with its creditors, notably China, India and Japan, and implement key economic reforms before the IMF’s first review in September.
The IMF bailout, the 17th in Sri Lanka’s history, called for tough economic reforms such as raising taxes, raising utility prices and abandoning money-losing state business enterprises, which met with fierce political opposition.
India provided multifaceted assistance to Sri Lanka during the height of its economic and humanitarian crisis in line with its ‘neighborhood first’ policy and as a loyal friend and partner of Sri Lanka.
New Delhi has extended lines of credit worth more than $4 billion to Colombo in diverse sectors including the supply of basic materials, petroleum and fertilizers, railway development, infrastructure, defense sector and renewable energy, according to the Indian High Commission here.
Sri Lanka’s unprecedented financial crisis in 2022 also sparked political turmoil in the country, toppling every power. Rajapaksa family.
Last year, Sri Lanka slid into its worst economic crisis since its independence in 1948 due to a drop in foreign exchange reserves that caused severe shortages of basic items and sparked massive public protests.
In April 2022, Sri Lanka announced its inability to pay its international debt due to the forex crisis.
The economic situation in Sri Lanka It got better after it got a $3 billion rescue package from the International Monetary Fund (IMF) in March.
The IMF’s lifeline has helped Sri Lanka boost its foreign exchange reserves and stabilize soaring inflation.
“With the stabilization of the economy, import restrictions were lifted on 286 commodities, starting Friday midnight,” the Finance Ministry said in a statement.
“Restrictions will continue on 928 items, including imports of cars, that were banned in March 2020,” the statement said.
“Imported goods can help moderate prices by providing consumers with low-cost options and alternatives,” said Sheehan Simasinghe, Minister of State for Finance.
In August last year, Sri Lanka imposed a ban on the import of 300 consumer items such as chocolates, perfumes and shampoos to address its economic problems.
Sri Lanka’s reserves grew by a staggering 26 percent to $722 million in May, while the currency has also gained 24 percent this year, according to central bank data.
Despite the positive signs, Sri Lanka’s road to full economic recovery remains arduous.
The country needs to complete debt restructuring talks with its creditors, notably China, India and Japan, and implement key economic reforms before the IMF’s first review in September.
The IMF bailout, the 17th in Sri Lanka’s history, called for tough economic reforms such as raising taxes, raising utility prices and abandoning money-losing state business enterprises, which met with fierce political opposition.
India provided multifaceted assistance to Sri Lanka during the height of its economic and humanitarian crisis in line with its ‘neighborhood first’ policy and as a loyal friend and partner of Sri Lanka.
New Delhi has extended lines of credit worth more than $4 billion to Colombo in diverse sectors including the supply of basic materials, petroleum and fertilizers, railway development, infrastructure, defense sector and renewable energy, according to the Indian High Commission here.
Sri Lanka’s unprecedented financial crisis in 2022 also sparked political turmoil in the country, toppling every power. Rajapaksa family.
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