Road Map for lifting of vehicle import restrictions to be presented tomorrow

Friday, 14 June 2024 - 12:58

According to the International Monetary Fund (IMF), a comprehensive plan will be ready by June 15th to gradually lift the vehicle import restrictions imposed by the Sri Lankan government. Peter Brewer, the executive head of the IMF's program for Sri Lanka, made this announcement during a press conference held by the IMF delegation from the United States on June 14th.

The road map details a phased approach to reintroducing vehicle imports. General passenger and special purpose vehicles will be allowed from the third quarter of 2024. Cargo vehicles will be imported starting in the fourth quarter of 2023, and other types of vehicles will follow in 2025.

The restrictions, initially imposed due to the economic crisis, have reportedly saved approximately 0.8 percent of Sri Lanka's GDP. The IMF noted that while there is sufficient progress in Sri Lanka’s Debt Restructuring process, the economy remains vulnerable, and maintaining reform momentum is crucial for achieving debt sustainability.

During the IMF's virtual press briefing on Sri Lanka’s second review of the Extended Fund Facility (EFF) program, IMF Senior Mission Chief for Sri Lanka Peter Breuer emphasized the IMF's respect for the democratic process and elections. He mentioned that while elections might impact the timing of IMF missions, the organization would adapt its schedule accordingly.

When asked about potential program adjustments and tax reductions by a new government post-elections, Breuer stressed the importance of rebuilding government revenues to address the severe crisis. He highlighted that aligning revenues with government expenditures is crucial for making the debt sustainable and enabling Sri Lanka to finance itself at affordable interest rates.

Breuer also mentioned the introduction of the 'Public Financial Management' law to Parliament, aimed at strengthening the fiscal framework and enhancing fiscal responsibility. This law is intended to ensure that government funds are spent as intended, further contributing to fiscal stability.

The IMF expressed its willingness to consider different views on achieving the program objectives, provided they are realistic and achievable within the program's timeframe. This approach underscores the IMF's commitment to supporting Sri Lanka through its economic challenges while respecting the country's democratic processes.

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