FINANCIAL CHRONICLE – In August 2026, Sri Lanka achieved a current account surplus of 133 million US dollars, according to official statistics, breaking a streak of four months of deficits.
The central bank attributed this surplus to a reduced trade deficit, which was influenced by a decline in import spending.
From January to August 2026, the current account recorded an overall deficit of 291 million dollars, primarily due to external sector challenges stemming from heightened conflicts in West Asia.
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The current account reflects the balance of the financial account, although it may be affected by errors and omissions.
In August 2026, the merchandise trade deficit expanded compared to the same month last year, driven by increased import costs and decreased export revenues. For the January to August 2026 period, the total trade deficit increased to 7.2 billion dollars, up from 4.3 billion dollars the previous year.
Fuel import expenditures reached approximately 4 billion dollars during the first eight months of 2026, marking a significant year-on-year rise of 61.6 percent. However, for the fourth consecutive month, fuel import costs decreased in August 2026.
The cost of motor vehicle imports was reported at 189 million dollars in August, reflecting a 24.2 percent decline from the same month in the previous year. Cumulatively, motor vehicle imports from January to August 2026 totaled 1.684 billion dollars.
According to the central bank, the terms of trade worsened year-on-year in August 2026, with import prices rising more rapidly than export prices. This trend continued for the January to August period compared to the same timeframe in 2025.
The services account showed a surplus of 220 million dollars in August, although this represented a 24.4 percent decrease from the previous year. Over the same January to August period, the total services account surplus dropped by 21.4 percent to 2.1 billion dollars year-on-year.
Tourist arrivals declined by 3.3 percent in August compared to the same month last year, and total arrivals for the January to August period fell by 2 percent relative to 2025. Estimated tourism earnings were 264 million dollars in August, indicating a slight increase of 2.1 percent from the previous year. However, total tourism revenue from January to August 2026 decreased by 10 percent to 2.1 billion dollars compared to 2025.
Meanwhile, workers’ remittances rose by 10 percent to 749 million dollars in August and increased by 19.8 percent to 6.1 billion dollars during the January to August period.
Foreign investment in government securities saw a net inflow of 70.2 million dollars for the month, while the Colombo Stock Exchange experienced a net outflow of 58.1 million dollars.
By the end of August, Sri Lanka’s gross official reserves had risen to 6.9 billion dollars. However, by the end of September, the Sri Lankan rupee had depreciated by 6.3 percent against the US dollar on a year-to-date basis.
