Remittances hold firm despite Iran war shock rippling through Mideast

Sri Lankan workers abroad continued to support the country’s fragile external sector in April, with remittance inflows remaining robust despite concerns that the escalating Iran war could disrupt labour markets across the Middle East, a key destination for Sri Lankan migrant workers.

Official data showed remittances rose to US$767.9 million in April, up from US$646.1 million a year earlier, although slightly lower than the US$814.8 million recorded in March.

March, which precedes the traditional Sinhala and Tamil New Year, has historically been one of the strongest months for remittance inflows, alongside December.

The April inflows brought total remittances for the first four months of 2026 to US$3.06 billion, marking a 24.5 percent increase from the corresponding period last year.

This resilience in remittance earnings comes despite fears earlier this year that the widening conflict involving Iran could trigger job losses, security risks, and potential reverse migration from the Gulf and Middle Eastern economies that host large numbers of Sri Lankan workers.

So far, however, those concerns have not materialised. Remittance flows continue to provide a critical buffer to Sri Lanka’s external finances at a time when pressures on the trade account have intensified.

The country’s oil import bill surged 74.7 percent year-on-year to US$630.1 million in March, as Sri Lanka paid sharply higher prices to secure fuel supplies amid disruptions to global energy markets following the outbreak of the war.

As a result, the trade deficit widened to US$879.7 million in March, up from US$395.6 million a year earlier.

The stronger remittance inflows have also helped offset softer tourism earnings, which have slowed in recent months, thereby cushioning the current account of the balance of payments.

However, whether remittances will continue to withstand prolonged geopolitical and economic pressures remains uncertain, particularly with the full April external sector data yet to be released.