Sri Lanka’s consumer price inflation recorded a deflation of 0.8% in the 12 months ending October 2024, with only a 0.3% increase over the past 25 months as the effects of the central bank’s deflationary policy begin to manifest in the balance of payments. The Colombo Consumer Price Index (CPI) declined by 0.5% in October
The Central Bank of Sri Lanka (CBSL) anticipates that deflationary trends will continue in the coming months before inflation gradually aligns with the medium-term target of 5.0 percent. Administratively determined price cuts and improved supply conditions are expected to keep consumer prices under downward pressure. In September, Sri Lanka experienced its first dip in consumer
Sri Lanka’s central bank announced that it would maintain policy interest rates between 8.25% and 9.25%, citing the likelihood of deflation in the near term due to easing supply conditions and adjustments to administratively controlled prices. “The Board observed that inflation is likely to remain well below the 5% target over the next few quarters,