Worker remittances inflow remains resilient
■ Cumulative remittances in first 9 months of 2020 surpass 2019 figure
■ Sept. remittance income up 36% to US$ 707mn, highest recorded for a month so far
■ Cumulative worker remittances as at end-sept now at US$ 5,048. 8 million, up 2.4%
■ For 2019 full year, SL received US$ 6.7 billion from worker remittances
Sri Lankans working abroad sent in substantially more money to their kith and kin back home in September with cumulative remittances eclipsing the total amount of moneys remitted back to the country during the nine months in 2019, signaling the resilience and the relative stickiness of the crucial foreign exchange income earner to the country.
Worker remittances surged by US$ 186.4 million or 36.1 percent to US$ 702.7 million in September from the same month in 2019, continuing its climb for the fifth consecutive month, after recording a recovery in May, with the easing of coronavirus related restrictions in the world.
September also marks the highest remittance income received in a month so far this year, beating even the months where Sri Lanka typically receives higher remittances income— March and November—ahead of the festive seasons.
Even during such periods, remittance income to Sri Lanka had not gone beyond the average of US$ 633 million, the Central Bank data for the last five years showed.
With the September boost, worker remittances for the nine months are now at US$ 5,048. 8 million, up 2.4 percent from the US$ 4,929.9 million received for the same period in 2019.
For the 2019 full year, Sri Lanka received US$ 6.7 billion from worker remittances.
However, multilateral lenders, such as the World Bank, have projected gloomy outlooks for remittance income for countries in the Asian region this year, including Sri Lanka.
While Sri Lanka is losing some dollar revenue from tourism and export of merchandise goods and services, the lower oil bill and the temporary suspension of non-essential imports are expected to save the country up to US$ 2.2 billion in reduced trade deficit, while the government is proactively engaged in bi-lateral and multi-lateral talks for credit and swap lines to bridge any external funding gaps until it regains favourable access to the international capital markets.
John Keells Stock Brokers last week said the government could return to the international capital markets next year to raise funds as the economy normalises after the worst lockdowns in April and May while the lower rates in the developed markets, which could remain there for the foreseeable future, could attract investors to frontier market bonds.