To ask the Secretary of State for Foreign, Commonwealth and Development Affairs, whether her Department has made an assessment of the effect of the amount of foreign exchange from UK tourism and migrant workers on the economy of Sri Lanka in the last three years.
Answered on
28 June 2022
This answer is a correction from the original answer.
We are closely monitoring the economic situation in Sri Lanka, including foreign exchange data reported by Central Bank of Sri Lanka and Sri Lankan authorities. Prior to the Covid-19 pandemic, tourism was a key export sector for Sri Lanka, making up almost 30% of total export revenues. However, Sri Lanka's tourism receipts declined by almost 80% in 2020 and fell by a further 60% in 2021. The UK is a key contributor to Sri Lanka's tourism sector. Remittances from overseas workers have also been an important contributor to Sri Lanka's economy in the past three years, worth around 8% and 9% of Sri Lanka's total GDP in 2019 and 2020, respectively. Despite initially remaining constant in 2020, remittances fell by over 20% in 2021, down to their lowest levels since 2011.
The UK recognises the difficult economic situation and welcomes the start in-depth discussions with the International Monetary Fund (IMF) on reforms needed to bring the economy back to a sustainable path. The Prime Minister spoke to the Prime Minister of Sri Lanka Ranil Wickremesinghe on 30 May, and underlined the UK's continued support for the people of Sri Lanka during their current economic difficulties.
Original answer
We are closely monitoring the economic situation in Sri Lanka, including foreign exchange data reported by Central Bank of Sri Lanka and Sri Lankan authorities. Prior to the Covid-19 pandemic, tourism was a key export sector for Sri Lanka, making up almost 30% of total export revenues. However, Sri Lanka's tourism receipts declined by almost 80% in 2020 and fell by a further 60% in 2021. The UK is a key contributor to Sri Lanka's tourism sector. It has been among the top three source markets in the past three years, placed as the second major country of origin for tourists in Sri Lanka in 2019 and 2020, and third in 2021. Remittances from overseas workers have also been an important contributor to Sri Lanka's economy in the past three years, worth around 8% and 9% of Sri Lanka's total GDP in 2019 and 2020, respectively. Despite initially remaining constant in 2020, remittances fell by over 20% in 2021, down to their lowest levels since 2011.
The UK recognises the difficult economic situation and welcomes the start in-depth discussions with the International Monetary Fund (IMF) on reforms needed to bring the economy back to a sustainable path. The Prime Minister spoke to the Prime Minister of Sri Lanka Ranil Wickremesinghe on 30 May, and underlined the UK's continued support for the people of Sri Lanka during their current economic difficulties.