Expenditure on Sri Lanka’s fuel imports increased by 112% (year-on-year) to US$ 536 million in May 2026, driven by the increase in oil prices and volumes, according to the Central Bank of Sri Lanka (CBSL).
However, on a month-on-month basis, expenditure on fuel imports reduced by 39.5% in May 2026.
The CBSL, issuing the external sector performance report for May, said Sri Lanka continued to be impacted by the war in the Middle East, with the current account recording a deficit for the second consecutive month in May 2026.
The external current account recorded a deficit of US$ 194 million in May 2026, mainly driven by the widened trade deficit, a moderation in the services surplus, despite an increase in workers’ remittances compared to a year earlier, the Central Bank noted. Accordingly, the external current account deficit during January to May 2026 amounted to US$ 97 million.
The merchandise trade deficit widened in May, as import expenditure increased at a faster pace than export earnings. Accordingly, the cumulative trade deficit widened to US$ 4.7 billion during January–May 2026, compared to US$ 2.7 billion in the corresponding period of 2025, the CBSL report said.
Meanwhile, expenditure on motor vehicle imports, including both personal and commercial vehicles, increased by 20.0% (month-on-month) to US$ 250 million in May, bringing the cumulative expenditure on motor vehicle imports to US$ 1,071 million during January–May 2026.
Moreover, tourist arrivals recorded a year-on-year growth of 9.6% in May, with total arrivals during the first five months of the year surpassing one million. Tourist earnings were estimated at US$ 156 million in May, reflecting a year-on-year decline of 5.1%, and the cumulative earnings during the first five months of 2026 declined by 11.9% amounting to US$ 1,360 million compared to the corresponding period of the previous year.
Workers’ remittances, which amounted to US$ 847 million in May, continued the favourable trend observed in recent months, according to the CBSL. Cumulative remittances during the first five months of 2026 increased by 26.0%, year-on-year, to US$ 3.9 billion.
Gross official reserves, including the swap facility with the People’s Bank of China (PBOC), stood at US$ 6.9 billion by end May 2026, supported by the receipt of the jointly disbursed sixth and seventh tranches under the Extended Fund Facility (EFF), despite sizeable external debt service payments and net foreign exchange sales by the Central Bank.
As of end June 2026, the Sri Lanka rupee depreciated by 7.9% against the US dollar on a year-to-date basis, reflecting external sector pressures arising from the conflict in the Middle East, the Central Bank added in its external sector performance report.
