Sri Lanka suffers sharpest monthly drop in worker remittances

Remittances drive local household expenditure in Sri Lanka, and Central Bank Governor Indrajit Coomaraswamy said recently the decline in money sent by the country’s overseas workers was disturbing. (AFP)
Updated 18 October 2017
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Sri Lanka suffers sharpest monthly drop in worker remittances

COLOMBO: Sri Lankan workers in the Middle East sent back fewer dollars in August, the sharpest monthly drop yet owing to adverse economic and geopolitical conditions in the region, its central bank said Wednesday.
Remittances declined by a record 10 percent to $556.6 million (SR2.08 billion), compared with $618.3 million in August last year, the bank said in a report.
About two million Sri Lankans or 10 percent of the population work overseas, mostly in the Middle East and in construction and hospitality or as household maids.
Money they send back to families is the main source of the country’s foreign exchange and is used to finance nearly 80 percent of its trade deficit.
Remittances in the first eight months of the year also fell by 6.3 percent to $4.5 billion, the bank said, the biggest drop ever seen and significantly more than 2015’s dip of 0.53 percent.
Central Bank Governor Indrajit Coomaraswamy said recently the decline in remittances was disturbing, while pinning his hopes on growth in the country’s small export sector.
Sri Lanka has been an exporter of skilled and unskilled labor for decades.
The fall in remittances is a double blow for the country, which is simultaneously having to shell out more for foreign workers.
That demand comes from a labor shortage at home in sectors such as construction and manufacturing, which have picked up since the decades-long Tamil separatist war ended in May 2009.


UK wage growth dips but interest rate increase seen on track

Updated 17 July 2018
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UK wage growth dips but interest rate increase seen on track

LONDON: Official figures show that wage growth in the UK moderated in the three months to May, a development that’s unlikely to change expectations that the Bank of England will raise interest rates next month.
The Office for National Statistics said Tuesday that average weekly earnings during the period were 2.7 percent higher than the year before. Though down on the previous 2.8 percent, wages are still higher than headline inflation, which in the year to May was 2.4 percent.
That means that household incomes continue to grow following a long squeeze when inflation outstripped earnings.
The Bank of England is widely expected to raise its benchmark interest rate on Aug. 2 to 0.75 percent partly because of the improvement in living standards.