Sri Lanka spends US$506.1 million on personal vehicle imports

• CNL Reporter
• September 1, 2025
• News, Political
• Vehicle Imports
• 0 Comments

Sri Lanka has spent US$506.1 million on personal vehicle imports in the first seven months of 2025, compared to just US$34.8 million in the same period last year, reflecting a dramatic surge in demand, official data show.

Commercial vehicle imports reached US$162.2 million, while investment goods overall climbed 22.5 percent to US$2.22 billion, buoyed by stronger remittances and tourism earnings. Building material imports also accounted for US$569.2 million, highlighting an ongoing revival in construction activity.

The spike in vehicle imports, however, is raising concerns among analysts who warn of risks linked to credit-driven consumption. Personal vehicles, often bought on loan, could overheat private credit growth, especially after recent central bank rate cuts. Economists argue that lower interest rates may encourage imports while draining foreign reserves needed to repay debt.

Although inflationary policies were scaled back after December 2024, recent reliance on central bank swaps has once again raised red flags. “Excess liquidity injections to enforce a single policy rate could destabilize the external sector despite stronger inflows,” analysts caution.

Meanwhile, the oil import bill fell to US$2.25 billion by July, compared to US$2.54 billion last year, supported by lower global oil prices and stronger renewable energy output.

While the decline in fuel imports has provided relief, the government now faces a tough balancing act: promoting investment while ensuring macroeconomic discipline. The trajectory of vehicle imports, analysts say, could serve as a key test of Sri Lanka’s fragile recovery