Purchasing Managers' Indices for both Manufacturing and Services activities expanded in February.

Manufacturing PMI sustained its expansion in February 2021 recording an index value of 59.4, owing to the expansion in Production and New Orders. Further, Stock of Purchases and Employment as well as Suppliers’ Delivery Time remained expanded supporting to sustain the overall Manufacturing sector PMI at an elevated level.

Services PMI increased to 56.5 in February 2021 indicating a further improvement in the services sector. This increase was underpinned by the expansions observed in new businesses, business activities and expectations for activity.

Sri Lanka’s external sector continued to recover in many aspects during January 2021, mainly supported by an improved trade deficit and a notable increase in workers’ remittances. The reduced deficit in the trade account in January 2021 compared to January 2020 was the result of a larger decline in merchandise imports over merchandise exports. Meanwhile, workers’ remittances continued to record a notable growth in January 2021, strengthening the external current account. In the financial account, foreign investment in the government securities market recorded a marginal net inflow while the Colombo Stock Exchange (CSE) recorded net outflows in January 2021. The Sri Lankan rupee experienced depreciation pressure in January 2021, but measures taken by the Central Bank and the continuation of restrictions on non-essential imports by the Government helped contain this pressure.