Sri Lanka’s export earnings surpassed US$ 10 billion during the first six months of 2026, according to the Central Bank’s latest External Sector Performance report.

Export earnings increased by 3.3% year-on-year to US$ 10.4 billion during the first half of 2026, driven by growth in merchandise exports, which rose by 6.3% to US$ 6.9 billion despite a decline in services exports.

Despite the milestone in export earnings, the country’s merchandise trade deficit widened to US$ 5.5 billion during the first half of 2026, compared to US$ 3.3 billion in the corresponding period of 2025, as import expenditure increased at a faster pace than export earnings.

The Central Bank noted that the external current account recorded a deficit of US$ 245 million during the first half of 2026, compared to a surplus in the corresponding period of last year. June alone recorded a current account deficit of US$ 149 million, marking the third consecutive monthly deficit.

Fuel imports continued to exert pressure on the external sector, with cumulative expenditure on fuel imports rising by 58.8% year-on-year to approximately US$ 3,168 million during the first six months of the year.

Meanwhile, expenditure on motor vehicle imports amounted to US$ 1,254 million during the first half of 2026.

Workers’ remittances continued to provide support to the economy, increasing by 23.2% year-on-year to US$ 4.6 billion during the January–June period. Remittance inflows in June alone rose by 9.3% to US$ 695 million.

The tourism sector, however, remained affected by the conflict in the Middle East. Tourist arrivals declined marginally to 1,146,573 during the first half of 2026, compared to 1,168,044 arrivals in the corresponding period of 2025.

Tourism earnings fell by 11.8% year-on-year to US$ 1,511 million during the first six months of the year, while June earnings declined by 10.8% to US$ 151 million.

Despite sizeable external debt service payments, gross official reserves stood at US$ 6.5 billion at the end of June 2026, including the swap facility with the People’s Bank of China.

The Central Bank further noted that the Sri Lankan rupee had depreciated by 7.8% against the US dollar on a year-to-date basis by the end of July, reflecting external sector pressures arising from the conflict in the Middle East, although the pace of depreciation has moderated in recent weeks. (Newswire)

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