Sri Lanka’s Current Account Posts Second Consecutive Monthly Deficit in May 2026 📉

Sri Lanka's external current account recorded a US$ 194 Mn deficit in May 2026, driven by a widening trade deficit and lower services surplus, pushing the Jan-May cumulative deficit to US$ 97 Mn. Performance reflects ongoing Middle East conflict pressures. • Overall Trade Figures: The cumulative trade deficit widened significantly to US$ 4.7 Bn during Jan–May 2026, up from US$ 2.7 Bn in the same period of 2025, as import growth outpaced exports. Terms of trade deteriorated YoY. • Key Import Sectors: - Fuel: YoY expenditure surged by 112% to US$ 536 Mn in May due to higher prices and volumes, though it fell 39.5% month-on-month. - Motor Vehicles: Rose 20% MoM to US$ 250 Mn, reaching a cumulative US$ 1.07 Bn for Jan–May. • Services & Tourism: The services surplus contracted 36.8% YoY to US$ 143 Mn. While tourism arrivals grew 9.6% YoY (surpassing 1 Mn arrivals Jan-May), monthly tourist earnings dipped 5.1% YoY to US$ 156 Mn. • Remittances & Capital Flows: Workers' remittances remained strong, rising 26% YoY to a cumulative US$ 3.9 Bn (US$ 847 Mn in May). However, May saw net foreign outflows from government securities (US$ 60 Mn) and the CSE (US$ 23 Mn). • Reserves & Currency: Gross Official Reserves stood at US$ 6.9 Bn at end-May, bolstered by the 6th and 7th IMF-EFF tranches. The Sri Lankan Rupee depreciated 7.9% against the US$ year-to-date as of end-June 2026.