By: Isuru Parakrama
May 02, Colombo (LNW): Sri Lanka witnessed encouraging signs of economic momentum in March 2025, with a surge in foreign remittances and export performance contributing to a cautiously optimistic outlook, according to data published by the Central Bank of Sri Lanka (CBSL).
Merchandise exports reached approximately US$ 1.24 billion during the month, representing an 8.1 per cent increase compared to the same period last year. This growth, seen across a variety of sectors including textiles, tea, rubber-based products, and electrical components, points to improved international demand and a gradual strengthening of the country’s export base.
Imports, meanwhile, also experienced a rise—climbing by 8.6 per cent year-on-year to over US$ 1.63 billion. This uptick suggests a recovery in domestic consumption and industrial activity, but also underlines the ongoing challenge of narrowing the trade deficit, a long-standing concern for Sri Lanka’s external sector stability.
One of the most significant developments noted in the report was the historic peak in foreign worker remittances. March recorded an inflow of US$ 693 million, the highest ever for that month in Sri Lanka’s history.
Analysts attribute this increase to improved labour market conditions abroad, seasonal factors, and enhanced efforts to channel remittances through official banking channels.
The boost in remittance inflows is expected to bolster foreign reserves and ease pressure on the country’s balance of payments.
Tourism, another vital pillar of the economy, also continued its post-crisis resurgence. A total of 229,298 visitors arrived in March, generating approximately US$ 354 million in revenue.
The uptick reflects ongoing promotional campaigns and the gradual restoration of traveller confidence in Sri Lanka as a safe and attractive destination.
Industry stakeholders are cautiously hopeful that tourism earnings will return to pre-pandemic levels over the coming years.
However, the Central Bank report also acknowledged certain macroeconomic pressures. The Sri Lankan rupee depreciated by 2.3 per cent against the US dollar between January and the end of April 2025.
Although this movement remains relatively contained, it underscores the continued vulnerability of the rupee to global currency fluctuations and import-driven outflows.
Despite these mixed signals, the broader economic indicators offer some hope for recovery following years of turbulence marked by debt crises, political instability, and a global pandemic.
Policymakers are expected to maintain a delicate balance between stimulating growth, managing inflation, and safeguarding foreign reserves as the country navigates its way through an ambitious economic reform agenda.
