The external sector is expected to improve further during the remaining period of 2014 with inflows to the current and financial accounts of the Balance of Payments (BOP). Tourist earnings are expected to increase with the commencement of the peak tourist season in November and workers’ remittances are expected to rise during the festive season.

This, together with the envisaged decline in the trade deficit is expected to reduce the current account deficit, while projected inflows by way of foreign direct investments, inflows to the Colombo Stock Exchange and private sector would help strengthen the financial account of the BOP.

Consequently, the overall BOP position is expected to record a healthy surplus by the end of the year despite some volatility experienced in the government securities and equity markets recently.