In an interview with Bloomberg, Governor Cabraal is questioned about whether Sri Lanka can secure enough foreign exchange inflows to bolster its declining reserves. In response, the governor suggests that the current foreign exchange shortage is temporary and will recede with the recovery of tourism receipts. Within this context, he refers to tourism as a “10-billion-dollar industry”, suggesting that potential inflows from tourism lost due to the COVID-19 pandemic to be in the order of USD 10 billion.
To check this claim, FactCheck.lk consulted the official statistics on tourism receipts published by the Central Bank of Sri Lanka (CBSL) and Sri Lanka Tourism Development Authority (SLTDA).
Exhibit 1 shows annual tourism receipts from 2011 to 2021 as reported by the SLTDA (see additional note on why these numbers are likely to be over-estimates). At its peak in 2018, the reported figure was USD 4.4 billion. Annualised growth in tourism receipts during the three-year period 2016-2018 up to the peak, was 11.6%.* Even if tourism bounced back in 2022 with a 11.6% increase from its peak in 2018, the estimated tourism receipts would still only be USD 4.9 billion.
The expectations set by the governor for the increase in foreign exchange inflows, from the recovery of the tourism, is over double that of even the most optimistic projection that might be claimed from the reported data. Therefore, we classify the governor’s statement as FALSE.
NB: Publicfinance.lk platform by Verité Research finds that official statistics may be inflating tourism earnings by overestimating average spending per day, which is the highest in the region at USD 181 per day in 2019, despite only 11% of all tourists staying in 5-star hotels. For more, see:https://publicfinance.lk/en/topics/earnings-from-tourism-are-we-getting-it-right-1646204834
*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.
**We omit 2019 as tourism receipts declined compared to 2018 following the Easter Sunday attacks.
Central Bank of Sri Lanka (CBSL). (undated).
Sri Lanka Tourism Development Authority (SLTDA). (undated). Tourism Growth Trends – 1985 to 2020. https://sltda.gov.lk/storage/common_media/Tourism_Growth_Trends_1985-2020.pdf