Sri Lanka, May 19 -- Sri Lanka is likely to experience new economic challenges in 2026 with a possibility of seeing a current account deficit this year, opposing the trend for the first time in four years, due to present higher US dollar outflows than inflows, amidst costly global oil prices due to the conflict in the Middle East (ME) and climate change, Central Bank (CB) Deputy Governor Chandranath Amarasekara told Parliament's Committee of Public Finance (COPF).

The Central Bank's senior officials also said that although there has been a balance of payments surplus for about three years, it is likely to turn into a small deficit in the current account this year.

Presenting the Annual Economic Review of the Central Bank 2025 before the...