News
Overseas Sri Lankans pump Rs 543b into economy in three months
View(s):By Kapila Bandara
Sri Lankans working overseas, mostly women in Kuwait, Saudi Arabia, Qatar, and United Arab Emirates, have poured billions into the economy in the first three months, underwriting their homeland at a crucial time of structural and policy reforms driven by the International Monetary Fund under a financing programme.
Up to March, Sri Lankans have sent home more than US$1.81 billion (Rs 543.134 billion) to keep their families fed and the national economy oiled. These are remittances via formal channels, and the overall tally could be larger.
Overseas worker cash inflows remain at substantial levels, continuing from the US$6.575b Sri Lankans contributed in 2024. That year, more than 313,640 Sri Lankans left to work overseas.
Inflows, surging in tandem with unprecedented levels of emigration, replenish the Central Bank of Sri Lanka’s forex reserves and build up forex liquidity of commercial banks. Improving forex liquidity also bolsters the rupee.
Households still remain under pressure and the macroeconomic situation is fragile. Exporters have failed for two decades and investment faltered. CBSL monetary indiscipline added to the toxic mix.
Remittances began to climb from January 2022 with a dip in April 2022, when the economy imploded. In that year about 26,000 left every month, a substantial increase. Remittances in 2022 were relatively low at US$3.789b. And yet, after the April bankruptcy declaration, Sri Lankans contributed US$304.1m in May, nearly equal to the US$333m first disbursement from the IMF in March 2023.
The three-month remittances total this year is greater than the January to March current account surplus, which is also buoyed by contributions of overseas Sri Lankans.
Separately, the three-month total inflow surpasses the export income of US$1.386b from the apparel sector, which then spent nearly US$678m to import inputs of textiles and textile articles, diluting the net gain to a few hundred million.
In March this year alone, Sri Lankans sent home US$693m, the highest so far this year, latest data from CBSL show. This even exceeds the monthly remittances in the comparable month of 2023 (US$568m) and of 2024 (US$572m).
January remittances of Sri Lankan workers were US$573m and US$548m in February. This, too, was well above inflows for those months in 2024 and 2023. In those two years, the monthly remittances had not exceeded US$614m. This highest monthly inflow of US$614m in the past two years was recorded in December 2024.
These remittances poured in as the US dollar moved from US$292.58 at year end 2024 to US$299.62 at end April 2025. At end December 2023, the greenback traded at US$323.92.
Comparatively, foreign direct investment mirrors the continuing failure of the Board of Investment officialdom. From 2017-2021 about 27% of all FDI went into real estate. For all of 2024, Sri Lanka received just US$761m FDI.
Not just remittances, Sri Lanka also benefits from the fees Sri Lankans pay. Up to end December 2024, the government collected an embarkation levy exceeding Rs 38b. Passports etc generated more than Rs 37b, government data show.
The 2025 first three months contribution of remittances is bigger than the Rs 481b revenue from taxes on international trade, such as import-export duties, ports and airports development levy, and special commodity levy in 2024.
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