📈 Impact of Middle East Conflict on Sri Lankan Migration & Remittances

The ongoing conflict in the Middle East poses a significant threat to Sri Lanka’s economic recovery, affecting labor migration and the steady flow of foreign exchange. • Overall Impact & Risks The Middle East (ME) accounts for approximately 50% of Sri Lanka's total remittances. Provisional data suggests a potential loss of ~19,980 foreign employment opportunities per month if the conflict persists. A halt in migration could lead to a 5% increase in the national unemployment stock relative to Q3 2025. • Migration Statistics Daily departures via official channels average 862, with 666 (77%) headed to the ME. Major affected destinations include UAE (52,067 departures in 2024) and Qatar (46,693 departures). The estimated stock of Sri Lankan migrant workers in the region stands at approximately 660,000. • Remittances & Household Economy Average monthly remittance per worker is estimated at US$ 509 (approx. LKR 150,000). In Feb 2026, formal remittances totaled US$ 729 Mn, surpassing the month’s consumer import bill of US$ 475 Mn. Disruptions risk a shift toward informal channels, weakening official foreign reserves and national import capacity. • Strategic Response Diversification of ICT/BPM and manual labor to non-ME markets like Italy, Romania, and Germany is urged. Government focus remains on activating "Contact Sri Lanka" for potential repatriations and ensuring wage protection via foreign missions.