The trade deficit widened in January 2020 compared to January 2019, as earnings from exports declined while expenditure on imports increased. Although the tourism industry rapidly recovered from the Easter Sunday attacks by end 2019, the COVID-19 outbreak reversed the recovering trend in January 2020. Workers’ remittances recorded a year-on-year growth in January 2020. Meanwhile, foreign investment in the government securities market recorded a net inflow in January 2020 while a net outflow was observed from the CSE. The Sri Lankan rupee remained broadly stable and appreciated against the US dollar in January 2020, but depreciated sharply in March in the face of the COVID-19 pandemic following a similar trend of many emerging market currencies due to strengthening US dollar and yen.

Headline inflation as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100)1increased to 8.1 per cent in February 2020 from 7.6 per cent in January 2020. This was driven by statistical effect of the low base prevailed in February 2019. Further, Food inflation (Y-o-Y) stood at 16.3 per cent in February 2020 while Non-food inflation (Y-o-Y) recorded at 2.1 per cent.