Slump in consumer imports reflects massive impact on people’s living standards

• Non-food consumer imports consisting mostly of things needed for better living conditions slump 43.5% 

The sharp decline in consumer goods imports, particularly non-food consumer goods last year reflected the extent to which consumer habits have been upended and how deep the people’s lifestyles have been damaged by the ongoing foreign exchange shortage.
Authorities imposed restrictions on imports which they deemed as nonessential since the beginning of the pandemic in 2020 which became more and more pronounced in the following two years to preserve limited foreign exchange for the essentials such as fuel, coal, gas, medicines and food. 

But, it has had a massive impact on people’s lifestyles and their upward social mobility, causing thousands to leave the country seeking destinations which could offer them better financial prospects and livingstandards.
Data released by the Central Bank showed that overall consumer goods in the first eleven months in 2022 had declined by 25 percent year-on-year (YoY), weighed mostly down by the 43.5 percent YoY slump in the non-food consumer goods. 

At a more granular level, these included things such as consumer discretionary items and durables consisting of home appliances, clothing and accessories, telecommunication equipment and furniture and other household items which people desire to attain for better living conditions after they have met the basic needs such as food. Telecommunication equipment imports which mainly consist of mobile phones, personal computers and other related devices fell 81.9 percent to just US$ 63.7 million in the eleven months to November compared to US$ 351.9 million in the same period last year, reflecting the extent to which the demand had been crushed in this space. 
The increasing absence of availability of these goods in the market and the losing affordability of these items due to both sharp depreciation of the rupee and the cost of living crises prompted many to leave the country for better career and life prospects.

According to government data, over 300, 000 left for foreign employment last year.
What is really concerning is the rapid decline in medicinal drugs and equipment imports last year in the face of the foreign currency shortage as such imports have declined by a substantial 36.9 percent to US$ 475.6 million in the eleven months over the same period in 2021. 

While the country moved past what was going to be an acute shortage of drugs last year, wide scale shortages of certain drugs still remain. However, the Central Bank attributed the sharp fall in the value spent on drugs in 2022 to the higher base effect in 2021 caused by the covid vaccines.  Meanwhile, food and beverage imports slipped 1.2 percent to US$ 1,478 million in the 11 months of 2022 mainly because of the higher global food and commodities prices which more than offset the decline in import volumes.
Sri Lankans were forced to cut down on their consumption including their food intake substantially since the prices shot up to hyper inflationary levels after the rupee lost 80 percent of its value last year.  

The data showed that the import volume index declined by 22.7 percent while the import unit value index increased by 5.9 percent in November over the same month in 2021. 
However, Sri Lanka spent US$ 404 million, nearly as much as 10 times the previous year’s levels on cereals consisting mostly of wheat flour in the eleven months, both due to higher volumes and the higher prices caused predominantly by the rising global corn and wheat prices which received a jolt from the Russian inflation of Ukraine in February last year.