- Eyes US$ 8bn from remittances, up from earlier forecast of US$ 7.5bn
- SL received record US$ 7.1bn in worker remittances in 2020
- Remittances in first 2 months of 2021 up 13.2% to US$ 1.3bn
- Sets current account balance target at a surplus of US$ 500 million
Sri Lanka has upgraded its targeted earnings from worker remittances for this year, as the numbers continue to appear better than last year’s levels making possible for the authorities to comfortably reach what once appeared an elusive goal.
The government previously vaguely mentioned that they expect to collect about US$ 7.5 billion from the reparation of migrant worker earnings in 2021 after a record amount was collected in 2020. But the Central Bank last week unequivocally said that they expect such incomes to reach US$ 8.0 billion.
Sri Lanka’s foreign exchange earnings from migrant workers reached a four-year high of US$ 7.1 billion last year despite it being a pandemic ravaged year, and only a handful of workers joining that workforce due to lockdowns and border closures.
During the first two months through February 2021, Sri Lanka collected US$ 1.3 billion in worker remittances, recording an increase of 13.2 percent from the same period in 2020.
The ongoing March is typically the month with the highest remittance income ahead of the New Year.
However, many migrant workers, who couldn’t visit their kith and kin last year, are expecting to return to Sri Lanka this year. But migrant repatriations occur at a snail pace. Serious concerns have been raised by returnees on the exorbitant rates charged on mandatory quarantine and bad treatment given to some of them.
However, last week the Sri Lanka Bureau of Foreign Employment said that those who are registered with the Bureau and wish to return could quarantine with zero payment.
A US$ 8.0 billion remittance income and a narrowed trade gap of US$ 4.0 billion from US$ 6.0 billion this year would leave an additional US$ 3.0 billion of foreign exchange for the country to deal with foreign currency needs for this year.
This is besides another billon and a half expected as tourism earnings.
Airfare spending among people above the age of 75 is substantially up in the United States, the most recent data showed in a sign of fast picking up domestic and foreign travel there.
“I would rather travel than do almost anything”, said one septuagenarian when asked what she would do first after receiving the COVID-19 vaccination.
Meanwhile, for the first time the Central Bank has become explicit in its projections of the external current account balance for this year, though it previously indicated that most likely it could turn a surplus in 2021.
The Central Bank expects the external current account balance to record a surplus of US$ 500 million in 2021 from an estimated US$ 1.1 billion in 2020.
The Central Bank also expect to end year with official foreign reserves of US $ 5.5 billion compared to US$ 5.7 billion in 2020.