For the first time in 28 months, Sri Lanka’s remittance inflows from overseas workers have recorded a decline, signaling potential challenges ahead for one of the country’s key foreign exchange sources. Official data revealed that remittances in November 2024 stood at $530.1 million, a 1.3% drop compared to the same period last year.
This marks the first year-on-year decline since August 2022, breaking a 27-month streak of consistent monthly increases. The dip is particularly notable given the critical role remittances play in stabilizing Sri Lanka’s foreign reserves, especially during the economic crises in recent years.
Cumulatively, remittances for the first 11 months of 2024 remain significant, contributing $530.1 million to the national economy. However, experts caution that the decline in November could be a signal of potential issues, such as reduced labor demand in host countries or economic pressures on expatriate workers, impacting their ability to send funds home.
The drop in remittances could also reflect challenges in Sri Lanka’s banking or regulatory systems, which have previously been scrutinized for offering unfavorable rates that pushed many workers toward informal channels. Authorities may need to investigate underlying causes and introduce measures to sustain remittance inflows in the coming months.
This decline comes amidst Sri Lanka’s broader economic recovery efforts, where foreign remittances remain a lifeline in bridging the country’s trade deficits and enhancing foreign exchange reserves.
