SL vehicle imports drop by 93.6% in July; lowest monthly outlay since Dec 2009

Expenditure on personal vehicle imports declined considerably by 93.6% in July 2020, the lowest monthly outlay since 8 December 2009, the Central Bank said in its latest report. According to the CBSL, The year-on-year declining trend observed in expenditure on merchandise imports since March 2020 continued in July 2020 as well, recording a decline of 24.6%, to US$ 1,294 million. Expenditure on all major import sectors declined in July 2020. This reduction is partly attributed to the measures taken by the government to restrict the importation of selected non-essential goods. The expenditure on intermediate goods imports declined in July 2020, year-on-year, led by fuel imports (-36.3%) and the importation of textiles and textile articles (- 20.7%). The reduction in expenditure in fuel imports was due to the refined and crude oil imports with lower petroleum prices in the international market. The average import price of crude oil declined to US$ 46.23 per barrel in July 2020, compared to US$68.73 a year ago. Import volumes of refined petroleum also declined, while higher volumes were recorded in crude oil and coal imports in July 2020 compared to July 2019. Meanwhile, the reduction in import expenditure of textiles and textile articles was led by lower imports of fabrics and yarn. Further, expenditure on all other sub categories under intermediate goods also declined in July 2020 compared to July 2019. The expenditure on investment goods declined notably, with decline in all sub categories in July 2020, on a year-on-year basis, resulting from the restrictions imposed by the government to curtail import expenditure. Accordingly, expenditure on machinery and equipment (mainly engineering equipment, electronic equipment, telecommunications devices and machinery and equipment parts), building material (mainly iron and steel and articles thereof, plastic, rubber and glassware, ceramic products and cement) and transport equipment (mainly commercial vehicles such as tankers and bowsers and auto-trishaws) declined in July 2020 when compared with July 2019. The expenditure on consumer goods declined led by non-food consumer goods imports, although the expenditure on food and beverages increased. As a result of import restrictions, the non-food consumer goods imports declined with lower expenditure on all sub categories except telecommunication devices (mainly mobile phones) and medical and pharmaceuticals. Meanwhile, import expenditure on food and beverages increased in July 2020, led by import of sugar, fats and oils (mainly coconut oil) and vegetables (mainly lentils). Both the import volume index and the unit value index declined by 16.1% and 10.1%, respectively, in July 2020, indicating that the decrease in import expenditure was driven both by lower volumes and lower prices when compared to July 2019.

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