- Sept. worker remittances down 7.1%
- Cumulative remittance earnings down 1.5%
The earnings sent back home by Sri Lankans working abroad, mainly in the Middle East, fell in September, weighing on the cumulative earnings for the first nine months of this year, the data released by the Central Bank showed.
Sri Lanka depends on remittance income to buttress its current account and of late has been witnessing a decline in remittances due to changing dynamics in the Gulf region as well as evolving socioeconomic realities locally.
Sri Lankans working abroad in total had sent home earnings worth US $ 500 million during September compared to US $ 538 million in the same month last year.
The cumulative remittance earnings for the nine months stood at US $ 5, 277 million, down 1.5 percent over the previous year. Worker remittances to Sri Lanka have averaged US $ 7.0 billion a year and, along with tourism flows, have accounted for bridging bulk of the negative balance in the current account.
However, since 2015, remittance flows showed signs of weakening as the Gulf region tightened their budgets amid sharply falling crude oil prices.
The falling trend in oil prices started seeing a reverse only in 2017 when the Organization of Petroleum Exporting Countries (OPEC) led by its de facto leader Saudi Arabia agreed for production cuts to end the supply glut.
Last week, OPEC and non-OPEC producers led by Russia again agreed to cut production by at least 1.2 million barrels a day to stabilize the prices, which fell by almost 30 percent since October.
On this news, the prices of crude at the Brent futures exchange—the global benchmark—rose 2.7 percent to US $ 61.67 a barrel.
Meanwhile, tourism flows—the largest services export inflow to Sri Lanka after remittances—rose to US $ 276 million in September from US $ 269 million in the same month a year ago.
The cumulative tourism earnings for the nine months of this year stood at US $ 3, 212 million against US $ 2, 878 million recorded for the same period last year.
Tourist arrivals for the nine months stood at 1,731,922 which was an 11.6 percent increase over the corresponding period in 2017.
The latest arrivals data for November showed tourist arrivals had continued unabated with a 17 percent increase over the same month last year.
Apart from remittances and tourism, Sri Lanka earns foreign inflows from other services such as IT/BPM.
Trade experts have pointed out that Sri Lanka could do well on the export of services such as professional services exports as the country has a robust output of professionals in many sectors.