28 September 2020 09:29 am
Worker remittances to Sri Lanka rose in August, continuing its ascent for the fourth month in a row, alleviating fears that the key foreign exchange income to the country will leave a deeper hole adding to the external pressures triggered by the coronavirus pandemic.
Remittance income from Sri Lankan migrant workers in August was at US$ 664.5 million, recording nearly 30 percent increase from the same month last year. Worker remittances to Sri Lanka were recorded at US$ 518.2 million in August 2019.
Remittance income accounts for the largest foreign exchange income for Sri Lanka, and it together with earnings from tourism, largely make up for the deficit created in the merchandise trade account.
However, the pandemic has decimated tourism earnings from April as Sri Lanka is yet to re-open airports.
In 2019, Sri Lanka made US$ 6.7 billion from worker remittances.
Sri Lanka appears to be recording a narrower trade deficit this year as a result of faster than expected rebound in merchandise exports and the muted imports from lower oil bill and the import controls in place for non-essential products, making the situation in the external front less severe than what appeared at the height of the pandemic.
With the August numbers coming out stronger, the first eight months’ earnings from remittances were at US$ 4.35 billion compared to US$ 4.41 billion in the corresponding period last year, down by marginal 1.5 percent year-on-year.
The Central Bank has projected a 14.6 percent decline in the remittance income for the full year as it revisited its earlier projections due to the virus.
If the current trend continues, Sri Lanka could largely make up for the slowdown seen in March and April.