Sri Lanka’s central bank reported a current account deficit of $149 million for June 2026, reflecting ongoing challenges in the external sector, particularly due to events in West Asia. This represents the third consecutive month of deficits.
For the first six months of 2026, the total deficit reached $245 million, a significant contrast to the surplus observed during the same period in 2025.
The Central Bank of Sri Lanka (CBSL) indicated that the merchandise trade deficit expanded year-on-year in June 2026, primarily due to a rise in import spending that outstripped the growth in export revenues. The trade deficit for the first half of 2026 grew to $5.5 billion, up from $3.3 billion in the first half of 2025.
In June 2026, expenditures on fuel imports surged by 40.2% compared to the previous year, totaling $3.168 billion for the first half of 2026, which is an increase of 58.8% year-on-year from the same period in 2025. Conversely, spending on motor vehicle imports saw a month-on-month decline of 27.1%, reaching $182 million in June 2026. For the first half of 2026, motor vehicle import costs decreased to $1.254 billion from $1.572 billion in the latter half of 2025.
Additionally, the terms of trade worsened year-on-year in June 2026, as import prices rose more rapidly than export prices. This trend was also observed in the first half of 2026 compared to the same timeframe in 2025.
The surplus in the services account dropped by 33.8% year-on-year to $162 million in June 2026, driven by a faster growth rate in service outflows compared to inflows. Tourist arrivals fell by 9.9% in June 2026, with a total of 1,146,573 visitors recorded in the first half of 2026, down from 1,168,044 in the corresponding period of 2025. Estimated earnings from tourism decreased by 10.8% year-on-year to $151 million in June 2026, with total tourism revenue in the first half of 2026 declining by 11.8% to $1.511 billion compared to 2025.
On a more positive note, workers’ remittances increased by 9.3% year-on-year, totaling $695 million in June 2026. Overall remittance inflows for the first half of the year rose by 23.2%, amounting to $4.6 billion.
Foreign investment in government securities recorded a net inflow of $30.2 million, while the Colombo Stock Exchange experienced a net outflow of $0.4 million in June 2026. By the end of June 2026, Sri Lanka’s gross official reserves stood at $6.5 billion.
As of the end of July 2026, the Sri Lankan rupee had depreciated by 7.8% against the US dollar since the beginning of the year.
