September 02, Colombo (LNW): Sri Lanka witnessed a significant drop in headline inflation, as measured by the Colombo Consumer Price Index (CCPI), with the year-on-year rate plummeting to 0.5 per cent in August 2024 from 2.4 per cent in the previous month.
This sharp deceleration aligns with the Central Bank of Sri Lanka’s (CBSL) forecasts, reflecting ongoing efforts to stabilise the economy.
Food inflation saw a decrease, falling to 0.8 per cent in August from 1.5 per cent in July 2024.
Similarly, non-food inflation experienced a notable reduction, dropping to 0.4 per cent from 2.8 per cent during the same period.
On a month-on-month basis, the overall CCPI declined by 1.85 per cent, driven by a 0.64 per cent reduction in food prices and a 1.21 per cent decrease in non-food items.
In addition to these figures, core inflation—which excludes volatile items and offers a clearer view of underlying inflation trends—declined to 3.6 per cent in August 2024, down from 4.4 per cent in July.
Looking ahead, CBSL projects that headline inflation will remain well below the 5% target in the coming months, with expectations that, over the medium term, inflation will stabilise around the targeted level, supported by ongoing policy adjustments.
This decline in inflation is seen as a positive signal for the Sri Lankan economy, suggesting that efforts to manage price levels and economic stability are yielding results.
However, the situation will continue to be closely monitored to ensure that inflation remains within the desired range.
