Sri Lanka’s Trade Deficit Widens to USD 6 Billion in 2024 Despite Record Export Earnings

Export Growth and Rising Imports

• Merchandise export earnings increased by 7.2% year-on-year to USD 12.8 billion, marking the second-highest annual export earnings in history.
• However, import expenditure surged by 12.1% to USD 18.9 billion, driven by growth across all major import categories, leading to the wider trade deficit.

Foreign Investments and Reserves

• The government securities market saw a net outflow of USD 179 million in 2024.
• A positive trend emerged in the last three months of the year, with a net inflow of USD 18 million in December 2024.
• Gross official reserves (GOR) increased to USD 6.1 billion at the end of 2024, compared to USD 4.4 billion at the end of 2023. This rise was supported by record-high central bank foreign exchange purchases and funds from multilateral institutions.
• The GOR includes a USD 1.4 billion currency swap facility with the People’s Bank of China, which was renewed for three years in December 2024.

The report underscores Sri Lanka’s strong export performance, ye