The Finance Ministry stated on Saturday that Sri Lanka has abolished import restrictions on nearly 300 commodities with immediate effect, signalling a clear indication that the island nation is slowly but surely recovering from its worst economic crisis in decades.
Due to sharp shortages of necessities and widespread public protests brought on by the decline in foreign exchange reserves over the previous year, Sri Lanka experienced its worst economic crisis since gaining independence in 1948.
Due to the FX crisis, Sri Lanka declared default on its international debt in April 2022. After receiving a $3 billion rescue package from the International Monetary Fund (IMF) in March, Sri Lanka's economic situation has improved. The IMF's lifeline enabled Sri Lanka to increase its foreign exchange holdings and control the inflationary spiral.
The Finance Ministry announced in a statement that
import restrictions on 286 commodities had been eased as of Friday at midnight. The statement stated that "restrictions on 928 items will continue, including the importation of vehicles, which was prohibited in March 2020."
Shehan Semasinghe, the Minister of State for Finance, stated that imported items "can help moderate prices by providing consumers with options and lower cost alternatives."To address its financial problems, Sri Lanka banned the import of 300 consumer goods in August of last year, including chocolates, perfumes, and shampoos.
According to central bank figures, Sri Lanka's reserves increased by an astonishing 26% to reach $722 million in May, while the country's currency also increased by 24% this year. Despite the encouraging signals, Sri Lanka's road to full economic recovery remains difficult.
Prior to the first IMF assessment in September, the nation needs to finish debt restructuring negotiations with its creditors, including China, India, and Japan, and achieve significant economic changes.
Source- Outlook India
