External sector momentum continues in July

• Exports hit record high
• Services sector sees modest softening
• Foreign investment in government securities remained in net inflow territory, offsetting net outflows from the CSE across both primary and secondary market
• Gross official reserves held steady at US$ 6.1 bn by end-July despite ongoing debt servicing pressures
• LKR recorded 3.3% year-to-date depreciation against the US dollar as of end-August

Sri Lanka’s external sector surged in July 2025, with record merchandise exports, strong remittance inflows, and rising tourism earnings fuelling consecutive current account surpluses.

Total exports, including merchandise goods and services, reached US$ 12.0 billion during the seven months ending July, posting a 6.7 percent year-on-year increase. July alone marked a milestone, with merchandise goods exports hitting a record US$ 1.3 billion, helping to narrow the merchandise trade deficit as export growth outpaced imports.

Vehicle imports, both personal and commercial, totalled US$ 193 million in July, bringing cumulative imports for the first seven months to US$ 668 million. Despite this, the terms of trade slipped as import prices rose faster than export prices.

The services sector saw modest softening, with net inflows slightly below July 2024 levels. Still, cumulative net inflows from January to July 2025 grew 3.3 percent to US$ 2.4 billion. 

Tourism contributed positively, with 200,244 arrivals in July, up 6.6 percent year-on-year, generating US$ 318 million for the month. Overall tourism earnings for January-July reached US$ 2.0 billion, edging past last year’s US$ 1.9 billion.

Workers’ remittances continued to stand out, posting US$697 million in July, the highest monthly inflow since December 2020. 

Meanwhile, foreign investment in government securities remained in net inflow territory, offsetting net outflows from the Colombo Stock Exchange (CSE) across both primary and secondary markets.

Gross official reserves, including the swap facility with the People’s Bank of China, held steady at US$ 6.1 billion by end-July despite ongoing debt servicing pressures. The Sri Lankan rupee, meanwhile, recorded a 3.3 percent year-to-date depreciation against the US dollar as of end-August.