Sri Lanka current account returns to deficit in Sep 2026

ECONOMYNEXT – Sri Lanka’s external current account returned to a deficit in September 2026 after recording a surplus a month earlier, even as merchandise export earnings rose, according to data released by the central bank.

The current account posted a deficit of 128 million US dollars in September, compared with a surplus in August.

The cumulative current account deficit for the first nine months of 2026 stood at 420 million dollars.

Sri Lanka’s merchandise trade deficit narrowed from a year earlier as export growth outpaced the increase in imports.

Export earnings rose 21 percent from a year earlier to 1.377 billion dollars in September.

Import expenditure increased 2.9 percent year-on-year to 2.109 billion dollars in September.

The central bank said spending on fuel imports fell for the fifth consecutive month on a month-on-month basis.

However, cumulative fuel imports in the January-September period rose 51.5 percent from a year earlier to around 4.5 billion dollars.

Expenditure on motor vehicle imports fell 34.4 percent from a year earlier to 188 million dollars in September, while cumulative vehicle import spending reached 1.87 billion dollars during the first nine months of the year.

Sri Lanka’s cumulative trade deficit widened to 7.9 billion dollars in the January-September period from 5.2 billion dollars a year earlier.

The services account surplus declined 34.3 percent year-on-year to 119 million dollars in September as services-related outflows, particularly travel and air transport payments, grew faster than inflows.

The cumulative services surplus fell 22.3 percent to 2.2 billion dollars during the first nine months of the year.

Tourist arrivals eased 0.3 percent from a year earlier in September, while arrivals during January-September were down 1.8 percent.

Tourism earnings were estimated at 186 million dollars for the month, up 1.5 percent from a year earlier.

However, cumulative tourism earnings fell 9.2 percent to 2.2 billion dollars.

The primary income account deficit widened to 241 million dollars in September from 152 million dollars a year earlier, largely due to higher dividend payments on direct investments.

Workers’ remittances continued to provide support to the balance of payments, increasing 5.6 percent to 734 million dollars in September.

Remittances in the first nine months of 2026 rose 18.1 percent from a year earlier to 6.9 billion dollars.

Foreign investors remained net sellers of Sri Lankan financial assets. Foreign investment in government securities recorded a net outflow of 39.9 million dollars in September, while the Colombo Stock Exchange saw a net outflow of 4.7 million dollars including primary and secondary market transactions.

Gross official reserves stood at 6.9 billion dollars at the end of September, including the currency swap facility with the People’s Bank of China.

The rupee had depreciated 6.8 percent against the US dollar by the end of October on a year-to-date basis, the Central Bank said. (Colombo/Nov01/2026)