Sri Lanka’s external sector continued to improve with increased exports and inflows to the financial account. However, the trade deficit widened in July 2017 compared to the corresponding month of 2016 due to higher import expenditure amid the increase in export earnings. Tourist earnings declined marginally in July while workers’ remittances increased, reversing its declining trend observed in the last four months. Inflows to the financial account continued to strengthen with net inflows to the government securities market, long term loans to the government, receipt of the third tranche of the Extended Fund Facility (EFF) of the International Monetary Fund (IMF), as well as continued portfolio investment inflows to the Colombo Stock Exchange (CSE).

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