By: Staff Writer
December 09, Colombo (LNW): For the first time in over two years, Sri Lanka’s workers’ remittances from expatriates saw a decline in November 2024. Official data revealed a 1.3% drop compared to the same period in 2023, with remittances amounting to $530.1 million. This marks the end of a 27-month streak of year-on-year increases that began in August 2022.
Despite the slight decline in November, cumulative remittances for the first 11 months of 2024 reached $5.96 billion, reflecting a 10.4% growth compared to the $5.4 billion recorded during the same period last year. Monthly remittance inflows had consistently exceeded $550 million since July 2024, signaling sustained contributions to Sri Lanka’s foreign exchange reserves.
Worker remittances remain a vital pillar of Sri Lanka’s economy, which is still recovering from the severe economic crisis of 2022. In 2023, the country recorded a significant 57% increase in remittances through formal banking channels, rising from $3.8 billion in 2022 to $5.97 billion. This growth was largely attributed to the Central Bank’s decision to abandon a parallel exchange rate system, which previously incentivized the use of informal money transfer methods like Undiyal and Hawala.
The Central Bank’s October 2024 report on external sector performance highlights continued positive momentum. Inflows to the current account improved foreign reserves and contributed to the appreciation of the Sri Lankan rupee. Between January and October 2024, total remittances amounted to over $5.4 billion—an 11.7% increase from the $4.8 billion recorded in the same period in 2023.
Key contributors to these figures include migrant workers in Kuwait, Saudi Arabia, and Qatar, with remittances for the first quarter of 2024 totaling $1.54 billion, followed by $1.6 billion in the second quarter. Additionally, departures for foreign employment in the first half of 2024 reached 149,810, with most workers heading to Middle Eastern countries.
To support its overseas workforce, Sri Lanka has implemented the National Policy and Action Plan on Migration for Employment (NPME). The policy includes provisions for legal assistance, educational programs for the children of migrant workers, and family development initiatives. These measures aim to safeguard the rights and well-being of migrant workers while optimizing their contributions to the national economy.
As one of Sri Lanka’s top sources of foreign exchange revenue, remittances are critical to stabilizing the economy and addressing the financial challenges stemming from the 2022 crisis. While the November dip may indicate a temporary fluctuation, long-term trends remain robust, bolstered by policy reforms and the resilience of the expatriate workforce.
