Sri Lanka’s service sector is showing positive signs with notable net inflows from tourism, transportation, and IT/BPO services. This is balanced by some outflows in other service sectors such as technical and business services.
A particularly bright spot is the computer and IT/BPO sector, which is leading the charge in generating income. Worker remittances are also on the rise, continuing a year-on-year upward trend.
There’s further positive news in the form of foreign investment. The Colombo Stock Exchange (CSE) saw its highest monthly net inflow since February 2022, while the government securities market experienced a net outflow. This suggests investor confidence in Sri Lankan equities.
The country’s foreign reserves remain steady at $4.5 billion, and the Sri Lankan rupee has shown significant appreciation against the US dollar over the past year. This positive trend extends to other major currencies as well.
While exports increased in February 2024 compared to the previous year, a steeper rise in imports led to a wider trade deficit. Despite this, the Sri Lankan rupee’s appreciation indicates continued external competitiveness.