External sector stays resilient in first half

• Total exports, including merchandise and services, climbed 6.8% YoY to US$ 10.1 bn in 1H
• Tourism earnings crossed US$ 1.7 bn during the period, while workers’ remittances jumped nearly 19%  to US$ 3.7 bn
• Growing appetite for imports widened the merchandise trade gap in June, with vehicle imports alone hitting US$ 163mn for the month
• Gross official reserves stood at US$ 6.1bn by end-June

Sri Lanka’s external sector held firm in the first half of 2025, registering a current account surplus, even as the merchandise trade deficit expanded in June. This was driven by a surge in vehicle imports, latest data from the Central Bank showed.

The current account stayed in the green through the first six months, marking monthly surpluses on the back of stronger service exports, robust worker remittances, and a solid tourism recovery.

Total exports, including merchandise and services, climbed 6.8 percent year-on-year to US$ 10.1 billion in the first half, as services-related inflows reached US$ 2.1 billion, up 8.1 percent from a year ago.

Tourism earnings crossed US$ 1.7 billion during the period, an increase of 10 percent from 2024. Meanwhile, workers’ remittances jumped nearly 19 percent to US$ 3.7 billion, continuing to provide a crucial buffer for the economy.

Still, a growing appetite for imports widened the merchandise trade gap in June, with vehicle imports alone hitting US$ 163 million for the month. This brought total vehicle imports in the first half to US$ 475 million, reflecting rising domestic demand for both personal and commercial transport.

Export and import prices declined in June, but the terms of trade turned slightly favourable as import prices dropped more sharply, easing some pressure on the trade balance.

The United States, India, and the United Kingdom remained Sri Lanka’s key export partners, while China, India, and the UAE topped the list of import origins, a trend consistent with previous years.

Foreign portfolio flows were mixed. While government securities saw a net inflow of US$ 90 million during the period, foreign investors pulled US$ 39 million from the Colombo Stock Exchange.

Despite external debt repayments, gross official reserves stood at US$ 6.1 billion by end-June, inclusive of the swap facility with the People’s Bank of China. The rupee, however, saw some weakening, depreciating 3.2 percent against the dollar as of end-July.