The Hon. Nishantha Jayaweera - Deputy Minister of Economic Development

¶ 01 Hon. Deputy Chairperson of Committees, several regulations under the Import and Export (Control) Act are before the House for approval: to permit limited imports of Kiri Samba due to shortages, tyres for SriLankan Airlines, and certain HS code changes. The Opposition keeps alleging a massive economic crisis and that the country is falling into an abyss. However, in 2025 we achieved, for the first time, the highest levels across key economic indicators, including the lowest-ever budget deficit and the highest revenue, with a primary surplus of 5.3 percent. GDP reached about US$109 billion (Rs. 32 trillion), and per-capita GNI reached US$5,003. We stabilized the economy in 2025.

¶ 02 Our plan for 2026, per the medium-term framework, was to expand growth from 5 percent achieved in 2025 to 7 percent. In the first quarter of 2026, results were promising. Then the Middle East war erupted—outside our control—raising import costs, especially fuel and energy, freight rates, and overall import bills in a highly import-dependent economy.

¶ 03 Vehicle imports were halted for five years. We fully opened them in 2025, intending to cap import value at around US$1.2 billion. Demand was very high; LCs opened reached about US$2.2 billion by end-2025. Even so, in 2026 we did not reimpose a ban, because of the growth contribution from such imports. LCs opened in the first five months of 2026 exceeded 2025 levels, absorbing significant foreign exchange.

¶ 04 Consequently, the rupee temporarily depreciated. This is not unique to Sri Lanka; other regional currencies—India, the Philippines, Thailand, Indonesia—also weakened. It was wrongly stated here, citing Bloomberg, that Sri Lanka was the worst hit; in fact, those reports highlighted India facing notable pressure. Please avoid misquotations.

¶ 05 Hon. Harsha de Silva made constructive points: market stability is key. Volatility rose due to a sudden import surge, fears of potential restrictions, and high fuel costs. Demand for dollars rose faster than supply, causing a temporary rupee depreciation.

¶ 06 We see five main avenues of stabilization: - Natural self-correction via limited purchasing power—though that alone is not sufficient; - Central Bank measures—already underway; - Government policy actions—being implemented; - Public self-restraint—limiting non-essential imports short-term for the country’s sake; - Communication to anchor expectations.

¶ 07 In early June, we expect US$700 million from the IMF, plus around US$1 billion this year from ADB, World Bank and others, improving dollar supply. With Central Bank actions, Government policies, and improved supply, the situation will be brought under control.

¶ 08 [Intervention]

¶ 09 Order, please! Is the House agreeable to extend time until today’s debate is concluded?

¶ 10 Hon. Members: Aye.

¶ 11 Continuing: I also wish to caution importers. Do not panic and over-import at high rupee costs in expectation of continued depreciation. With forthcoming measures and inflows, the rupee can strengthen back toward prior levels, leaving those large stocks with losses. Please act prudently and support stabilization.

¶ 12 If this were a true 2022-style crisis, the economy would collapse as it did when we ran out of dollars. Today, we have funds, we are servicing debt, and we have no such fear. The present depreciation stems from demand-supply mismatch in dollars, which will be addressed through imminent policy steps by the Government and the Finance Ministry. We expect to stabilize this in the short term. People should avoid unnecessary panic, limit non-essential imports, and proceed responsibly.

¶ 13 We temporarily imposed additional duties mainly to pause luxury vehicle imports, not development-related categories. Vehicles essential for agriculture, public transport lorries, trucks, buses were not subject to the surcharge. Our measures are aligned to support economic expansion. Thank you, Hon. Deputy Chairperson.

¶ 14 Question put, and agreed to.