Sri Lanka’s external sector surged ahead in March 2025, delivering its highest-ever monthly current account surplus since the Central Bank began compiling such statistics in January 2023. The US$ 459 million surplus marks the third consecutive month of positive balances, offering a promising outlook for the island’s fragile economic recovery.
At the heart of this success was a record US$ 693 million in workers’ remittances, as overseas Sri Lankans sent home more money than ever before for the month of March. Improved global labor mobility, favourable exchange rates, and better formal remittance systems contributed to this significant spike.
Meanwhile, tourism earnings rose to US$ 354 million, up from US$ 338 million a year ago. With renewed destination marketing, visa relaxations, and improved global perception, Sri Lanka continues to strengthen its tourism rebound—vital for employment and foreign exchange stability.
“This performance reflects the resilience of core inflow channels and growing investor confidence,” a senior Central Bank official stated.
However, not all indicators pointed upward. The merchandise trade deficit widened to US$ 396 million, though it marked a slight improvement from February’s US$ 411.3 million. The terms of trade improved marginally, as global import prices declined faster than exports. Export and import volumes both grew, suggesting rising economic activity.
On the financial front, foreign investment in government securities posted a net inflow of US$ 49 million, while the Colombo Stock Exchange (CSE) saw a minor net outflow of US$ 6 million, reflecting cautious optimism among international investors.
Crucially, Sri Lanka’s gross official reserves rose to US$ 6.5 billion, driven by the fourth IMF tranche under the Extended Fund Facility (EFF) and Central Bank FX purchases totaling US$ 402 million. These developments enhance the country’s financial buffer and support debt repayment commitments.
Despite the positive inflow momentum, the Sri Lankan rupee depreciated by 2.3% against the US dollar as of April 2025. Analysts warn this remains a vulnerability, particularly amid global dollar strength and import-linked currency pressures.
Bottom Line:
Sri Lanka’s March 2025 performance marks a turning point in its post-crisis recovery. While remittances and tourism shine, sustained policy focus is needed to manage trade deficits, bolster investor confidence, and maintain currency stability.
