Lower motor vehicle imports contribute towards narrowing 2020 trade deficit by approx. USD 2 billion


‘Since importation of motor vehicles into Sri Lanka takes a significant portion of the total import bill of the country, that is 3 per cent in 2020, reduction in motor vehicle imports contributed largely towards narrowing the trade deficit. Accordingly, the trade deficit contracted notably by around USD 2 billion in 2020, a Ceylon Chamber of Commerce press release, announcing the release of the latest Motor Vehicle Industry Report, covering key trends in 2019 and 2020, said.

The release:

This publication prepared by the Economic Intelligence Unit of the Ceylon Chamber of Commerce (CCC) provides a detailed analysis and overview of Sri Lanka’s motor vehicle Industry covering both 2019 and 2020. The report features the latest information on economic contribution of the industry, motor vehicle registration, ownership transfers, population, imports of motor vehicles (a detailed analysis by vehicle category and HS code), issuance of driving licenses, recent regulatory developments, the way forward and global motor vehicle industry.

The report highlights that both 2019 and 2020 were challenging years for Sri Lanka’s motor vehicle industry due to import restriction. As such, imports of motor vehicles recorded a notable decline during last two years, after experiencing a significant growth in 2018. Since importation of motor vehicles into Sri Lanka takes a significant portion of the total import bill of the country (3% in 2020), reduction in motor vehicle imports contributed largely to narrowing of the trade deficit. Accordingly, the trade deficit contracted notably by around USD 2 Bn in 2020 and this contraction was significantly contributed by the lowered motor vehicle imports during the year. The decline in motor vehicle imports resulted in loss of revenue to the government mainly due to fall in collection of excise duty and luxury tax. Due to the fall in imports, there was a 45% drop of motor vehicle new registrations. As such, total registrations of 2020, hit the lowest for the last decade and even lower than the registrations recorded in 2009, when the world experienced the global financial crisis.

To purchase a copy of the report (e-version), contact Saumya Amarasiriwardane, Senior Research Associate, Economic Intelligence Unit of the Ceylon Chamber of Commerce on 011-55-888-83/ saumya@chamber.lk or online through the Business Publications section of the CCC website (www.chamber.lk).




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