Sri Lanka worker remittances growth stagnant

ECONOMYNEXT – Growth in Sri Lankan worker remittances, which has helped shore up the balance of payments, was virtually stagnant last year, raising concerns since much of it comes from the troubled Middle East.

Workers’ remittances grew by just 0.8 percent to 6,361.8 million US dollars in the January-November 2015 period from a year ago, the central bank said in its report on the latest economic developments.

In 2014, worker remittances grew by 9.5 percent to 7,017.8 million dollars from the previous year.

Remittances from Sri Lankans employed abroad in recent years have exceeded earnings from tea and garment exports, the main agricultural and industrial exports, and have helped offset much of the persistent trade deficits.

Central bank governor Arjuna Mahendran said reliance on remittances from the Middle East was a risk.

“About 50 percent of our remittances of seven billion dollars come from the Middle East,” he told a news conference. “ISIS attacks are causing instability there.”

Export growth prospects were also limited by the slow down in global economic growth which were seen in lower demand for traditional exports like tea and rubber, Mahendran said.

But he said foreign exchange reserves were comfortable and the island’s anticipated five percent economic growth demonstrated the resilience of the economy. (Colombo/January 03, 2016)

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