Sri Lankan inflation rises to 2.7% in April from 2.5% in March

Sri Lankan inflation rises to 2.7% in April from 2.5% in March
Sri Lankan inflation rises to 2.7% in April from 2.5% in March

Consumer price inflation in Sri Lanka rose to 2.7% in April from 2.5% in March, according to official data released on Tuesday.

The National Consumer Price Index (NCPI) reflects general retail price inflation and is published with a 21-day lag each month.

Food prices rose 3.3% in April, compared to 5% in March, the Census and Statistics Department said.

Prices of non-food items increased by 2.3% in April, compared to 0.7% in March, as the impact of the 22% reduction in electricity tariffs for households implemented in March was dissipated.

Analysts say headline inflation is unlikely to move significantly over the next three months as global oil prices and local demand pressures are expected to remain subdued.

Inflation will remain within the Central Bank of Sri Lanka’s (CBSL) 5% target.

“Inflation could increase slightly due to rising food prices in the coming months. Inflation could therefore reach 4-4.5%, but there is no cause for excessive concern ” said Dimantha Mathew, Head of Research at First Capital.

Sri Lanka has seen record inflation that peaked at 70% in September 2022, after its economy was crushed by the worst financial crisis in decades, triggered by a sharp fall in foreign exchange reserves.

Thanks to a $2.9 billion program from the International Monetary Fund, Sri Lanka’s economy has slowly stabilized and is expected to grow 3% in 2024, after two years.

Slowing inflation has prompted the Central Bank of Sri Lanka to cut policy rates by 700 basis points since last year to help the economy return to growth.

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