Sri Lanka’s current account surplus grew sharply during the first eight months of 2025, reaching $2.04 billion, driven by stronger inflows from worker remittances, tourism, and services, according to the latest data from the Central Bank of Sri Lanka (CBSL). The surplus represents a 26.1% year-on-year (YoY) increase from $1.6 billion in the same period last year, despite a widening trade deficit and rupee depreciation.
The CBSL said that while merchandise trade continued to exert pressure, improved inflows from key service sectors and the diaspora offset the shortfall.
In August 2025, Sri Lanka’s trade deficit narrowed slightly to $414 million from $422 million a year earlier, as exports rose 4% YoY to $1.28 billion, outpacing the 2.6% growth in imports to $1.69 billion. However, over the first eight months, the trade deficit widened 19.6% to $4.26 billion, reflecting a faster increase in imports (10.5%) compared to exports (6.7%).
The CBSL also noted a deterioration in the terms of trade, as import prices rose faster than export prices. The Sri Lankan rupee depreciated 3.3% year-to-date against the US dollar by end-September.
While the services sector dipped 5.4% YoY to $291 million in August, cumulative net inflows in services rose 2.3% to $2.66 billion for January–August 2025.
Tourism continued to show resilience. Arrivals surged 20.4% YoY in August to 198,235, though earnings for the month fell 8.2% to $259 million. Cumulative tourism revenue reached $2.3 billion, up 5.7% from the previous year.
Worker remittances remained a major stabilizing factor, climbing 18% YoY in August to $681 million. Total remittances in the first eight months reached $5.1 billion, marking a robust 19.3% increase from $4.3 billion a year ago.
Foreign investment trends were mixed. Government securities recorded a net inflow of $32.9 million in August, compared to a $30 million outflow last year. However, foreign investment in the Colombo Stock Exchange (CSE) turned negative, with a $15.2 million outflow, reversing the $12.7 million inflow seen a year ago.
During January–August 2025, the CSE saw $69 million in net outflows, while investments in government securities surged 155% to $140.2 million. Debt-related inflows rose 34% to $714 million, though portfolio investments fell 39% to $332.6 million.
Despite ongoing external debt servicing, gross official reserves edged up to $6.2 billion by end-August 2025, including the People’s Bank of China swap facility, reflecting cautious but steady external sector stability.
