​Worker remittance inflows show signs of turnaround

• Expatriates sent back US$ 359.3 mn as remittances in September
• Sept. also marks the first YoY increase in remittances since the current falling streak began
• SL has collected a total of US$ 2,574.1 mn as workers’ remittances for Jan - Sept period

Sri Lankans working abroad have continued to send back more money as of late after hitting the lowest point in the first half of this year. 

Their efforts are helping the country to alleviate the implications of the worst currency crisis which sparked runaway inflation and widespread shortages of essential commodities giving rise to prolonged political and social unrest. 
Sri Lankans expatriates sent back US$ 359.3 million as remittances in September. It is the highest so far this year after authorities allowed greater foreign exchange rate flexibility from March followed by restrictions on the use of open accounts by some imports which effectively brought down the appeal for informal channels as their premiums over official exchange rates became less attractive.

Recently, the government also announced a host of other incentives from increased duty-free allowances to permits to import electric vehicles to the opening of a dedicated entrance for migrant workers to woo more expatriates to use formal channels when repatriating their money.  

The September record brought the current stretch of rising inflows to its third consecutive month since July, measured on a monthly basis. 

Meanwhile, September also marked the first time the remittances managed to register growth on a year-on-year basis since the current falling streak began in 2021 June, which ended up unraveling the entire economy hit by the severe shortage in foreign exchange. 

In September 2021 Sri Lanka received US$ 353.2 million in remittance income in its fourth consecutive month of declines. 
The authorities pin hopes on the trend to persist as people use more of the formal channels due to less attractive premiums offered by the informal channels and the exodus of people going out of the country to escape the most deplorable working and living conditions brought about by the economic crisis this year, and are expected to return part of their earnings back home. 

However, unlike in the past, many skilled employees leave the country along with their entire families to relocate to countries with better living conditions, and thus it is unlikely that they will have much reason to send any money back.

In any case, there are doubts if the remittances would return to their pandemic highs of around US$ 550 to US$ 600 million a month on average as authorities spotted continuous overstatement of worker remittance by the banks due to their failure to distinguish what was coming from the workers from the rest of other foreign remittances.
The issue is now being fixed and thus the new data would present the actual remittances coming from Sri Lankans working abroad. 

With September inflows, Sri Lanka on a cumulative basis has collected US$ 2,574.1 million in the first nine months as worker remittances compared to US$ 4,577.5 million in the same period in 2021. 
However, 2021 doesn’t stand as a fitting year for comparison as the country lost about US $ 1.5 billion last year from the US$ 7.0 billion the country generally earns from worker remittances. 
 
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