COLOMBO: Sri Lanka’s consumer prices climbed 0.3% year-on-year in June after a 0.6% rise in May, official data showed on Monday, as the economy continued to recover from its worst financial crisis in decades.
The National Consumer Price Index captures broad retail price inflation and is released with a lag of about three weeks every month.
Sri Lanka plunged into financial crisis due to a record shortage of dollars three years ago, with inflation soaring to 70% at its height in September 2022.
Since, the economy has rebounded and grew 5% in 2024, after a contraction of 2.3% the previous year.
But inflation is only expected to reach the Sri Lankan central bank’s target of 5% in 2026, analysts said.
“The impact of food, power, and fuel price increases in May are easing now,” said Shehan Cooray, head of research at HNB Stockbrokers.
Sri Lanka’s consumer prices rose 0.6% year-on-year in May
“But we are likely to see inflation edging up in the coming months as the low-base effect wears off.”
The Central Bank of Sri Lanka (CBSL) has gradually reduced interest rates, including a surprise 25-basis-points cut in May, taking the overnight policy rate to 7.75%, in an effort to boost the economy.
The central bank is widely expected to keep policy rates unchanged at its Wednesday meeting as it awaits clarity on U.S. tariffs and the transmission of its May rate cut, a Reuters poll showed.
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