External sector stays resilient in April despite import surge

• Current account surplus holds for fourth month

Sri Lanka’s external sector showed steady footing in April 2025, holding its ground amid mounting import pressure, as the country posted a current account surplus for the fourth consecutive month, thanks to strong inflows from tourism and worker remittances.

Data from the Central Bank of Sri Lanka (CBSL) showed that the uptick in services exports and secondary income kept the current account in positive territory despite a widening merchandise trade gap. 

According to official data, imports jumped 17.5 percent year-on-year, largely driven by a notable US$134 million in motor vehicle imports.

Exports, though up 10.4 percent from a year ago, lagged behind the pace of imports, widening the trade deficit. Yet, the boost from tourism and remittances continued to provide critical cover. Tourism earnings rose to US$257 million in April, compared to US$ 226 million last year. Remittances also climbed, reaching US$ 646 million from US$ 544 million in April 2024.

These inflows have been steadily anchoring the external account since the beginning of the year. January saw record tourism receipts of US$ 401 million (the highest monthly figure on record) while remittances then stood at US$ 573 million. Though tourism earnings eased to US$ 368 million in February and US$ 354 million in March, remittance flows stayed strong, peaking at US$ 693 million in March.

Capital markets, however, presented a mixed picture. Foreign investment in government securities slipped into a net outflow of US$ 12 million in April, following a US$ 49 million net inflow the previous month. Equity flows remained modest, with a US$ 3 million net inflow into the Colombo Stock Exchange, recovering from a US$ 6 million outflow in March.

Sri Lanka’s gross official reserves were held at US$6.3 billion by end-April, marginally lower than March’s US$ 6.5 billion, which had been bolstered by IMF funding and Central Bank purchases. The rupee, meanwhile, has slipped 2.3 percent against the US dollar so far this year.

Despite the wider trade deficit, improving terms of trade with easing import prices more than export prices, helped soften the impact.