Sunanda Bandara on automobile imports: Has sized up risk, with outsized claim on data

Fact Check

Former presidential advisor Sunanda Madduma Bandara claimed that Sri Lanka’s import spending in December 2024 (USD 822 million) exceeded pre-COVID levels, arguing that resuming automobile imports would be “somewhat” risky.

To verify this claim, FactCheck.lk reviewed External Sector Data from the Central Bank of Sri Lanka (CBSL). The data aligns with the figures cited by the former presidential advisor.

To evaluate the claim and argument, FactCheck.lk compared December 2024 data against monthly records from the previous ten years (2015-2024). The analysis revealed that, out of 120 months:

– 8 months had higher imports than December 2024, with 5 of these months being pre-COVID (before 2020).

– 23 months had higher trade deficits, with 18 of these months being pre-COVID.

Therefore, the claim that imports and trade deficits exceeded pre-COVID levels is incorrect.

To evaluate whether the current import and trade deficit figures warrant concern about resuming vehicle imports, FactCheck.lk also examined past trade figures with automobile imports subtracted, as the current figures were obtained with restrictions in place. Then for the same period:

– 4 months since 2015 had higher imports than December 2024, with one of these months being pre-COVID.

– 12 months (10%) since 2015 had higher trade deficits, with 8 of these months being pre-COVID.

The argument, built on the claim, is that resuming automobile imports would be ‘somewhat risky’, given the data. When automobile import values are subtracted from past pre-COVID data (60 months between January 2015 and December 2019), December 2024 imports are in the top 2%, and trade deficits are in the top 13%.

Therefore, even though the simple claim made about the data is not correct, the modest argument of ‘somewhat’ risky can be supported by comparing against pre-COVID levels of imports and trade deficits, with automobile imports subtracted from past data.

Therefore, we classify the former presidential advisor’s statement as PARTLY TRUE.

Additional note: The inflation-adjusted figures offer a more accurate comparison since USD inflation (based on the GDP deflator for the USD) between 2019 and 2024 raised the nominal value of traded goods by around 20%. Since 2015, in real terms, imports (excluding vehicle imports) have exceeded the December 2024 figures in 53 months, or 44% of the time, with 44 of these months occurring pre-COVID, and the trade deficit (excluding vehicle imports) was higher than the December 2024 figures in 42 months (35% of the time), with 33 of these months occurring pre-COVID. 

*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.