Sri Lanka’s Import Surge Welcomed by IMF, But Long-Term Impact Under Review

COLOMBO (News 1st); The International Monetary Fund (IMF) has acknowledged the surge in motor vehicle imports in Sri Lanka as a positive contributor to government revenue, but cautioned that the trend may not be sustainable in the long term and should be carefully evaluated when planning future budgets.

IMF Mission Chief for Sri Lanka Evan Papageorgiou said the increase in vehicle imports has been stronger than anticipated, reflecting a rebound in domestic demand and the release of pent-up consumer interest following years of import restrictions.

Papageorgiou noted that while the revenue generated from these imports has helped bolster public finances, the IMF is working with Sri Lankan authorities to assess how much of this momentum can be expected to persist into 2026.

The IMF is factoring this data into its discussions on the upcoming national budget, recognizing that vehicle imports are just one part of a broader economic picture.

Papageorgiou emphasized that reserve accumulation—a key indicator of economic resilience—is influenced by multiple factors, including tourism, remittances, and exports, which help offset the foreign exchange outflows caused by imports.

He confirmed that the Central Bank of Sri Lanka is currently on or ahead of pace in meeting its net international reserve targets under the IMF programme, and that the recent import surge has not negatively impacted reserve levels so far.

However, Papageorgiou stressed the importance of prudent forecasting, noting that the IMF is closely monitoring the intensity and sustainability of vehicle imports as a key parameter in its ongoing discussions with both the Central Bank and the government.