According to the Central Bank of Sri Lanka, the country experienced a deficit in its external current account for April 2026, contrasting with the surplus that was noted from January to March 2026. This shift was primarily attributed to an expanded trade deficit, a decrease in the services surplus, and a heightened primary income account deficit, although remittances from workers showed an increase compared to the previous year.
In April 2026, the merchandise trade deficit increased, driven by a rise in imports that outpaced exports. The trade shortfall reached $3.7 billion during the January-April period, in comparison to $2.3 billion for the same timeframe last year. Additionally, expenditures on fuel imports saw a significant rise.
In April, Sri Lanka’s monthly expenditure on fuel soared to $886 million. Furthermore, the expenses related to motor vehicle imports amounted to $208 million for April alone, with total expenses for motor vehicles reaching $821 million during the first four months of 2026.
The terms of trade showed a year-on-year decline in April, as the growth in import prices outstripped that of export prices. This trend continued throughout January to April 2026.
The surplus in the services account fell by 37.8% year-on-year, landing at $229 million in April, primarily due to decreased revenue from tourism. For the January-April period, the cumulative surplus shrank by 24.3% when compared to the same months in 2025. The number of tourists visiting Sri Lanka dropped for the second month in a row in April, with arrivals totaling 135,643, marking a year-on-year decrease of 22.3% attributed to the ongoing conflict in West Asia, as noted by the central bank.
Tourism revenue for April 2026 was estimated at $157 million, reflecting a significant year-on-year decline of 38.8%. Cumulatively, tourism earnings for the first four months of 2026 fell by 19.4%, totaling $1.111 billion compared to the same period in the prior year.
In terms of workers’ remittances, the figure for April stood at $768 million. Over the first four months of the year, remittances recorded a year-on-year increase of 24.5%, amounting to $3.063 billion.
Foreign investments in the government securities market recorded a modest net inflow of $2 million, whereas investments in the Colombo Stock Exchange (CSE), including both primary and secondary market activities, experienced a net outflow of $16 million in April.
By the end of April, Sri Lanka’s gross official reserves (GOR), which includes a swap facility with the People’s Bank of China, were approximately $6.8 billion, despite ongoing external debt obligations and net foreign exchange sales by the Central Bank of Sri Lanka (CBSL).
As of the end of May 2026, the Sri Lankan rupee had depreciated by 5.4% against the US dollar on a year-to-date basis.
