By Uditha Jayasinghe
COLOMBO (Reuters) – Sri Lanka has lifted import restrictions on 200 items, the finance ministry said on Saturday, which is a sign that the It’s a fresh sign that the South Asian nation is starting to emerge from its worst economic crisis in decades.
Islands off India’s southern coast were in crisis last year as foreign exchange reserves ran out. The government restricted imports of more than 3,928 items, including seafood, electronics, and even musical instruments.
Its fortunes have improved over the past nine months. Sri Lanka received a $2.9 billion bailout from the International Monetary Fund (IMF) in the months since, tempering once-soaring inflation and set out to rebuild its foreign exchange reserves.
Sri Lanka’s reserves grow by 17% to 17 month high gain Income from remittances and tourism rose to $3.5 billion in May. The currency has risen about 17% this year, central bank data show.
“As the economy stabilizes, import restrictions on 200 items have been lifted from midnight Friday,” Treasury said in a statement .
Restrictions on 928 items will continue, including imports of cars banned in March, the statement said.
A wide range of items, from railway carriages to radio broadcast receivers, are included in the latest derestricted list.
Sri Lanka will also reduce the price of 26 essential medicines by % starting this week .
Despite the easing of the crisis, the country still needs to complete debt negotiations with creditors by September in time for its first IMF program review and implement Key economic reforms to put its recovery on a sustainable path.
The IMF expects Sri Lanka’s economy to contract by about 3% this year after contracting 7.8% last year, but the government forecasts a return to growth next year.