Mar 17, 2014 (LBO) – Sri Lanka’s vehicle registrations have dropped to 23,130 units in February 2014, the lowest since April 2010, with a sharp drop in commercial vehicles, an analysis by an equities research house shows. Sri Lanka is recovering from a balance of payments crisis triggered by loans taken from state-run banks by utilities to subsidize energy which ultimately were accommodated by central bank credit.
Interest rates were raised and the rupee floated to correct the problem, but vehicle taxes were also raised, which some critics said say is Mercantilist knee-jerk response.
The International Monetary Fund also urged the state not to engage in such measures.
In addition to an overall slowdown in economic activity it is not clear whether a consolidation process kicked off by the regulator in the finance company sector is also making firms more cautious about giving new loans.
February with 28 days is a ‘short month’ which usually results in low registrations, followed by a pick-up in March. This year registrations dropped 17 percent from January, compared to a 15 percent drop in February 2013 from a month earlier.
The first Lamborghini car, a Gallardo LP 550, was also registered in the m