Sri Lanka’s Current Account Slips into Deficit in April Amid Global Pressures 📈

• Overall Balance: Sri Lanka's current account recorded a US$ 532.4 Mn deficit in April 2026 (down 204.1% YoY from a US$ 176.6 Mn surplus). This erased 1Q gains, leaving a marginal Jan-Apr deficit of US$ 0.9 Mn, compared to a US$ 1.12 Bn surplus in 2025. • Trade & Imports: The April merchandise trade deficit widened to US$ 1.38 Bn as imports surged 45.7% YoY to US$ 2.46 Bn, outpacing export growth of 10.9% (US$ 1.07 Bn). The Jan-Apr trade deficit hit US$ 3.69 Bn (up 25.2% YoY). Heavy pressure came from fuel imports, which soared 149.9% YoY to US$ 886 Mn due to Middle East conflict-driven oil prices, alongside US$ 208 Mn spent on vehicle imports in April. • Tourism & Services: The services surplus fell 37.8% YoY to US$ 229.2 Mn in April, pulling the Jan-Apr services cumulative total down 24.3% YoY to US$ 1.2 Bn. Driven by regional conflict disruptions, April tourism earnings dropped 38.8% YoY to US$ 157.1 Mn as arrivals fell 22.3% to 135,643. • Remittances & Reserves: Providing key economic resilience, workers' remittances rose 18.8% YoY to US$ 767.9 Mn in April, bringing the Jan-Apr total to US$ 3.06 Bn (up 24.5%). Gross official reserves remained steady at US$ 6.8 Bn (3.5 months of import cover). • Markets & Currency: The Sri Lankan rupee depreciated 5.4% YTD against the US$ by end-May. April saw a net inflow of US$ 2 Mn in Government securities and a net outflow of US$ 16 Mn from the CSE. Financial stability is expected to be reinforced by the IMF's approval of US$ 695 Mn following the combined 5th and 6th reviews.