Sri Lanka’s external sector stays resilient in January despite widening trade deficit

• Trade deficit widens to US$ 733 mn
• Gross official reserves totalled US$6.1 bn by end-January

Sri Lanka’s external sector kicked off 2025 on a strong note, with steady inflows from services exports, tourism, and remittances helping offset pressure from a widening trade deficit, the Central Bank said.

The current account posted a higher surplus in January compared to a year ago, supported by improvements in services and secondary income, even as merchandise trade saw a year-on-year (YoY) expansion in the deficit. Import expenditure totalled US$ 1.78 billion, outpacing export earnings which amounted to US$ 1.053 billion, but the terms of trade improved as export prices rose at a faster pace than import costs.

Tourism earnings surged to an estimated US$ 401 million in January, marking the highest-ever monthly arrivals recorded for the start of a year. Workers’ remittances maintained their growth momentum, with 25,536 Sri Lankans departing for foreign employment during the month, provisional data showed.

Foreign investments in government securities registered net inflows, reflecting investor confidence, while the Colombo Stock Exchange recorded net outflows across both primary and secondary markets.

Gross official reserves remained stable at US$ 6.1 billion by end-January, including the swap facility with the People’s Bank of China. After a bout of depreciation in January, the Sri Lankan rupee strengthened in February, the Central Bank noted.