Rising Imports and Weak Exports Threaten Sri Lanka’s 2025 Surplus

Sri Lanka’s external sector is showing renewed strain as the current account fell into deficit for the second straight month, with October posting a USD 199.5 million shortfall. Despite a year-to-date surplus of USD 1.65 billion, rising import demand is rapidly eroding earlier gains. October’s trade deficit doubled to USD 1 billion, driven by a 26.7% surge in imports including USD 261 million in vehicle imports while exports fell 0.7% during the month.

Worker remittances remain the only major bright spot, rising 20% to USD 6.52 billion by October, but tourism earnings and services inflows show only marginal improvement. The rupee has weakened 5% so far this year despite USD 6.2 billion in reserves.

Economists warn that unless export growth strengthens, the shrinking surplus may reverse entirely, exposing the economy to price pressures and renewed external instability in 2026

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