Car imports push Sri Lanka's September current account into deficit

Colombo, Nov 3 (PTI) Sri Lanka’s external sector recorded a current account deficit in September due to the ongoing surge in car imports, the central bank here has said.

This follows a streak of current account surplus from January to August this year, according to a statement by the Central Bank of Sri Lanka issued over the weekend.

“The merchandise trade deficit recorded a year-on-year expansion in September 2025 as import expenditure exceeded USD 2 billion, primarily driven by a surge in vehicle imports,” the statement said.

Vehicle imports totalled USD 286 million in September, with cumulative vehicle imports reaching USD 1.3 billion in the first nine months of the year, it said.

Sri Lanka resumed car imports in February after a five-year hiatus. Imports were stopped in 2020 due to forex shortages, the COVID-19 pandemic, and the island nation's economic crisis of 2022.

In April 2022, Sri Lanka declared its first-ever sovereign default. As a shortage of essentials and fuel caused public protests, an Indian credit line of USD 4 billion provided a lifeline.

A year later, Sri Lanka entered a rigidly conditioned International Monetary Fund bailout, basing the economic recovery on prescribed reforms.

The central bank said the island nation’s gross official reserves were placed at USD 6.2 billion at the end of September, while the Sri Lankan rupee had depreciated nearly 4 per cent against the US dollar during the 10 months ending October.

Market analysts said the total vehicle registrations had risen sharply to 48,798 units in September, up from 38,240 units in August.

Motor car registrations had also risen sharply to 4,268 units in September, up from 2,329 units in August. PTI CORR GRS GRS GRS