Sri Lanka earnings from tourism up: Workers’ remittances decline marginally in July 2018

Oct 09, 2018 (LBO) - Sri Lanka’s external sector recorded a moderate performance in July 2018. The trade deficit continued to widen in July 2018 (year-on-year) with higher import expenditure despite export earnings surpassing US dollars 1 billion during the month. Earnings from tourism recorded a modest growth while workers’ remittances declined marginally, on a year-on-year basis, during the month, the Central Bank said issuing a statement. Tourist arrivals increased moderately by 6.0 per cent with 217,829 tourist arrivals in July 2018 despite July being the traditional off season period for tourists during the year. Total tourist arrivals during the first seven months of 2018 were 1,382,476 with a growth of 13.7 per cent in comparison to the corresponding period of 2017. Earnings from tourism in July 2018 are estimated at US dollars 404 million, with cumulative earnings amounting to US dollars 2,564 million during the first seven months of 2018. Meanwhile, workers’ remittances recorded a moderate decline of 1.6 per cent, year on year, to US dollars 619 million in July 2018. Consequently, on a cumulative basis, up to July 2018 workers’ remittances grew by 0.5 per cent (year-on-year) to US dollars 4,243 million. The financial account recorded moderate inflows during July, while requirements of debt servicing and other outflows resulted in a decline in gross official reserves to US dollars 8.4 billion as at end July 2018. The foreign exchange market continued to be under pressure with outflows of foreign investments from the government securities market and increased foreign exchange demand for imports thus necessitating intervention by the Central Bank to curtail intra-day excess volatility in the exchange rate.