Sri Lanka’s worker remittances surged by 21.1% year-on-year (y-o-y) in March, reaching a historic monthly high of $ 693 million, the Central Bank reported. This marks the highest March remittance inflow on record, providing critical support to the country’s external sector.

Remittances have been a lifeline for Sri Lanka’s economy, with cumulative inflows for Q1 2025 totaling $ 1.81 billion, an 18.1% increase compared to the same period last year. The rebound is attributed to stronger migration flows to the Middle East and Europe, as well as tighter anti-illegal money transfer measures by authorities.

The surge helped Sri Lanka post a current account surplus of $ 459.5 million in March, the third consecutive monthly surplus. Combined with tourism earnings of $ 354 million, up by 4.6% y-o-y, and transport services growth up by 10.8% y-o-y, remittances have eased pressure on foreign reserves.

However, challenges remain. Personal transfer outflows rose 27.9% y-o-y, reflecting increased overseas spending by Sri Lankans. Additionally, while gross official reserves climbed to $ 6.5 billion, the rupee depreciated by 2.3% against the US dollar year-to-date, highlighting lingering forex vulnerabilities.

Economists urge policy reforms to attract formal remittance channels and enhance migrant worker welfare programs to sustain this growth. With remittances accounting for nearly 80% of secondary income inflows, their stability remains crucial for Sri Lanka’s economic recovery.