Worker remittances decline in June ending 13-month long run

„June remittance income down to US$ 478.4mn from US$ 572.5mn a year ago „But remittance income in first half still up 11.6% to US$ 3.32bn

„SL revised down its remittance target to US$ 7.5bn for this year from US$ 8bn

„Remittance income hit four-year high to reach US$ 7.1bn in 2020

Earnings from worker remittances declined in June from a year ago levels ending a thirteen-month long spell of continuous climb seen from May last year, but the income for the first six months of 2021 is still higher than what the country received a year ago.

The Sri Lankans working abroad sent back US$ 478.4 million during June 2021, compared to US$ 572.5 million repatriated in the same month in 2020.

June worker remittance numbers ended the longest spell of continued increases in monthly repatriations recorded year-on-year after it began in May last year.

With June data, Sri Lanka had received US$ 3.32 billion in cumulative remittance income for the first six months, up 11.6 percent from the same period in 2020.

Worker remittances remain the only bright spot in Sri Lanka’s external sector as virus related restrictions decimated the US$ 4.5 billion plus tourism trade and blunted the merchandise exports earnings momentum during the last couple of months.

As officials grew cautious of the ability of remittance inflow to continue its strong momentum given the increasing number of returnees, low departures and virus flare ups in host countries, they recently settled for an annual target of US$ 7.5 billion from such income, down from an earlier target of US$ 8.0 billion.

Sri Lanka received 5.8 percent more from worker remittances to US$ 7.1 billion in 2020, reaching a four-year high.

With its domestic production policy-tilt and the need for multi-skilled workforce to power industries, Sri Lanka is increasingly facing a conundrum between retaining its workforce home and encouraging migration to buttress its near to medium term external sector woes.

While employers have long been calling for more liberal labour immigration to fill skill shortages in almost every sector, labour migration remains a hot issue in Sri Lanka, specially with the country’s pseudo-nationalists and trade unions.

But they have no doubt about closer to two million Sri Lankans working around the world in multitude of disciplines, which is made possible by the free labour market and benign immigration policies in those countries are in place to attract best talent from elsewhere.