External pressures push current account into deficit amid Middle East conflict

SRI LANKA RECORDS FIRST MONTHLY CURRENT ACCOUNT DEFICIT SINCE OCTOBER 2025, REACHING US$ 532MN IN APRIL; A SURGING IMPORT BILL, DRIVEN BY GLOBAL FUEL PRICES AND VEHICLE IMPORTS, WIDENS THE TRADE DEFICIT AND OUTPACES EXPORT GROWTH

- 

Sri Lanka's external sector faced severe renewed pressures in April 2026, with the current account slipping into a deficit of US$ 532 million, largely driven by the escalating conflict in the Middle East.

According to the latest data from the Central Bank of Sri Lanka, this reverses the positive trend observed during the first quarter of the year. Notably, this marks the first monthly current account deficit the island nation has recorded since October 2025, which saw a shortfall of US$ 218.6 million.

Furthermore, historical quarterly data indicates that the April contraction stands as the most significant current account shortfall since the height of the economic crisis in early 2022, which saw a massive deficit of US$ 1,331 million in the first quarter.

The April contraction dragged the cumulative current account balance for the first four months into a marginal deficit of US$ 0.9 million, a sharp turnaround from the robust surplus of US$ 1,124 million recorded in the corresponding period of last year.