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Krishani
Krishani
Oct 01 2026
31Sri Lanka’s external current account returned to a surplus of $ 133 million in August after four consecutive months of deficits, as lower import expenditure narrowed the trade gap compared with recent months.The surplus followed deficits recorded from April to July, according to the Central Bank of Sri Lanka’s (CBSL) External Sector Performance report for August.
It was, however, well below the $ 376 million surplus recorded in August 2025. The current account posted a cumulative deficit of $ 291 million during January-August, compared with a surplus of $ 2 billion in the corresponding period of 2025. The CBSL attributed the shortfall to pressures on the external sector stemming from the escalation of the Middle East conflict.
On a year-on-year (YoY) basis, the merchandise trade deficit widened to $ 674 million in August from $ 414 million a year earlier, driven by higher import expenditure and lower export earnings. The cumulative trade deficit expanded to $ 7.2 billion during the first eight months from $ 4.3 billion in the corresponding period of 2025, an increase of about 68%.
Merchandise imports rose 12.8% YoY to $ 1.9 billion in August, while the cumulative import bill increased 24.1% YoY to $ 16.6 billion during January-August. Total exports of goods and services declined 2.7% YoY to $ 1.8 billion in August. Cumulative exports increased 1.5% YoY to $ 14.1 billion during the first eight months.
Monthly fuel import expenditure declined for the fourth consecutive month in August. Cumulative fuel import expenditure amounted to about $ 4 billion during January-August, up 61.6% YoY. Expenditure on personal and commercial vehicle imports fell 24.2% YoY to $ 189 million in August. Cumulative vehicle import expenditure reached $ 1.7 billion during the first eight months. The terms of trade deteriorated YoY in August, and during January-August, as import prices rose faster than export prices.
The services account surplus contracted 24.4% YoY to $ 220 million in August. Services outflows rose 23.5% YoY to $ 329 million, with spending on travel abroad up 46.2% to $ 111 million. The cumulative services surplus declined 21.4% YoY to $ 2.1 billion during January-August, while cumulative spending on travel abroad increased 62.1% to $ 815 million. By end-September, the rupee had depreciated 6.3% against the US dollar on a year-to-date basis, trading at Rs. 330.83 compared with Rs. 309.99 at end-2025.
