News
Remittances surpass forex reserves and garments income
View(s):By Kapila Bandara
Billions in foreign currency sent home last year by Sri Lankans working and living overseas have, as expected, anchored the country’s external sector resilience at a time of persistent economic vulnerability.
Remittances of Sri Lankans jumped to US$6.575 billion in 2024, year-end figures show, exceeding the meagre gross official reserves of US$6.1 billion, which includes the People’s Bank of China’s 10 billion yuan swap facility worth US$1.4 billion.
The highest amount of remittances came in December—US$614 million.
The 2024 remittances also surpassed the US$3.169 billion earnings from tourism and also exceeded US$5.06 billion in export proceeds from textiles and garments. This is not a net gain. The garments sector spent US$2.847 billion forex on imported inputs.
Remittance inflows, which are a net gain for Sri Lanka, would have been enough to cover the entirety of the US$5.2b trade deficit in 2021 with change left over and enough to pay off the Central Bank debt of US$3.1b at the end of 2022.
Remittances would also be enough to cover the US$6.069 billion cumulative deficit in the trade account in 2024.
In contrast to remittances, foreign investment inflows (primary and secondary market transactions) to the Colombo Stock Exchange were US$227 million in all of 2024. Excluding the outflows of US$194 million, the net gain was just US$33 million.
Computer and information technology/business process outsourcing-related services generated US$848 million.
The biggest portion of the foreign exchange is sent home by women domestic helpers in West Asia. Many women are in the 40-44 years age group. Often Kuwait, Saudi Arabia, and Qatar make up the top three sources of Sri Lankan remittances. In the final quarter of 2023, Sri Lankans in Australia contributed US$33 million, less than the US$36.2 million remitted by Sri Lankans in Maldives.
In 2023, more than 297,650 Sri Lankans went to work overseas. They contributed more than US$500 million every month.
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