Sri Lanka current account deficit reached $149 million in June as fuel imports surged, tourism earnings fell and the trade gap widened.
The Sri Lanka current account deficit reached $149 million in June 2026 as rising fuel imports and weaker tourism earnings pressured the external sector.
The Central Bank of Sri Lanka said developments in West Asia continued to affect the country’s external position.
June marked the third consecutive month in which Sri Lanka recorded a current account deficit.
The cumulative current account deficit for the first half of 2026 reached $245 million. In contrast, Sri Lanka recorded a surplus during the corresponding period of 2025.
“The merchandise trade deficit widened on a year-on-year basis in June 2026, as the increase in import expenditure outpaced the growth in export earnings,” the Central Bank said.
The merchandise trade deficit expanded to $5.5 billion during the first six months of 2026.
That compared with a deficit of $3.3 billion during the corresponding period of 2025.
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Fuel Imports Drive Wider Trade Deficit
Expenditure on fuel imports increased by 40.2% year-on-year in June 2026.
Sri Lanka spent $3.168 billion on fuel imports during the first half of the year. This represented a 58.8% increase from the corresponding period of 2025.
However, spending on motor vehicle imports declined during June.
Motor vehicle import expenditure fell by 27.1% from the previous month to $182 million.
Sri Lanka spent $1.254 billion on vehicle imports during the first half of 2026. That was lower than the $1.572 billion recorded during the second half of 2025.
The country’s terms of trade also deteriorated in June.
“The terms of trade deteriorated on a year-on-year basis in June 2026, as import prices increased at a faster pace than export prices,” the Central Bank said.
The terms of trade during the first half of 2026 also weakened compared with the corresponding period of 2025.
Tourism Earnings Fall as Remittances Rise
The services account recorded a surplus of $162 million in June. However, that figure represented a 33.8% year-on-year decline.
The Central Bank attributed the decline to services outflows growing faster than services inflows.
Tourist arrivals fell by 9.9% from a year earlier in June 2026.
Sri Lanka welcomed 1,146,573 visitors during the first half of the year. That compared with 1,168,044 arrivals during the same period in 2025.
Estimated tourism earnings declined by 10.8% year-on-year to $151 million in June.
Earnings during the first six months of 2026 fell by 11.8% to $1.511 billion compared with the corresponding period of 2025.
However, workers’ remittances continued to strengthen.
Remittance inflows increased by 9.3% year-on-year to $695 million in June.
Sri Lanka received $4.6 billion in workers’ remittances during the first half of 2026. This represented a 23.2% increase from the same period a year earlier.
Reserves Reach $6.5bn as Rupee Weakens
Foreign investment in the government securities market recorded a net inflow of $30.2 million.
Meanwhile, foreign investment in the Colombo Stock Exchange produced a net outflow of $0.4 million during June.
Sri Lanka’s gross official reserves stood at $6.5 billion by the end of June 2026.
However, the rupee remained under pressure.
By the end of July, the Sri Lankan rupee had depreciated by 7.8% against the US dollar on a year-to-date basis.
The figures show that stronger remittances and government securities inflows provided some support to the external sector.
However, the wider trade gap, higher fuel expenditure and falling tourism income continued to deepen the Sri Lanka current account deficit.
