Asia Pacific Finance Trade

Sri Lanka’s Worst Economic Crisis, Imports Tough; Countries Helping

Sri Lanka’s economic crisis is wreaking havoc with multiple factors pushing pressure on authorities and eventually citizens of Sri Lanka. The Southeast Asian country is also facing troubles with managing the inbound shipments and imports to maintain inventories.

Sri Lanka imports grew by 71.63% year-on-year in February 2022, revealed from Sri Lanka import data. It has become increasingly intense for Sri Lanka to allow the imports and most importantly, pay for the importation of commodities required in the country right now. Few countries have lent hands to Sri Lanka for the current circumstances prevailing.

Sri Lanka Imports

Sri Lanka is already in debt to other countries and is finding it tough to make imports in the country at the current moment. As shown in the representation of Sri Lanka imports below, the trend for imports in Sri Lanka shows that the Southeast Asian country imported the highest in the first quarter of 2021 with an import value of $5.2 billion. The current imports in Sri Lanka, for the first quarter of 2022 (excluding February due to limited imports records), the value touched $3.7 billion. The month of February in 2022 spiked by almost a 70% high on a year-on-year basis.

Sri Lanka Imports (Q1-2021—Q1-2022)

Sri Lanka Top Imports

Sri Lanka’s top imports in 2021 are represented below in the graphical format. The categorisation of the commodities is divided into 2-digit levels, representing “Chapters” of HS Code classification. This includes industrial machinery with a share value of 10.7% ($1.9 billion) at the top and electronics with a share value of 10.4% ($1.8 billion) afterwards.

Current prevailing circumstances in Sri Lanka also show crucial signs of the shortage of pharma products, especially medicines, to buy from the drug store. The represented Sri Lanka import data shows the value of imports is merely for a 5% share value ($924 million) for 2021.

Sri Lanka Top Imports (2021) – By Chapter

Sri Lanka Import Partners

Sri Lanka has good bilateral relationships with its neighbouring countries such as China and India. As evidenced by the Sri Lanka trade partners 2021-2022 shown below, both the neighbouring countries of Sri Lanka are at the top. While China shows a share value of 23.6%, India shows a share value in imports of 22.4%, both for the ending year of 2021.

Sri Lanka Top Importing Partners (2021)

Countries Helping Sri Lanka

China has come forward to provide a loan to Sri Lanka for an approximate amount of $2.5 billion. Both the countries’ bilateral trade is getting stronger with the introduction of a few close negotiations on bilateral relations. Since 2018, China is providing Sri Lanka with budget support loans. Below represented data shows the top imports made by Sri Lanka from China in 2021.

Sri Lanka Top Imports From China (2021) – By Chapter

India has also signed for lending a loan of around $1 billion to Sri Lanka for the imports of food and medicines. The previous month, India urgently sent out a consignment of diesel under a $500 million credit to the economic crisis facing the country, in addition to the fuel imported from Sri Lanka. The below represented Sri Lanka imports show the top Sri Lankan imports for 2021.

Sri Lanka Top Imports From India (2021) – By Chapter

COVID-19, rising inflation, Russia-Ukraine war are some of the external factors that have affected the economy of Sri Lanka which is going through one of its worse economic times. On the other hand, internal factors such as tax cuts in 2019 and the Eastern Sunday blasts in 2019 as well have also influenced the economic worsening of the country.

While the Sri Lanka economy is hoping to rebound with the help given by its neighbouring countries such as China and India, Sri Lanka is already in debt that puts a heavy toll on the country, aside from the current ongoing economic crisis of Sri Lanka.

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