July, 1, 2024
Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) accelerated to 1.7% in June 2024 from 0.9% in May 2024. This acceleration in the headline inflation is broadly in line with the projections of the Central Bank of Sri Lanka (CBSL). Even with this acceleration, inflation remained well below the inflation target of 5%.
Food inflation (Y-o-Y) accelerated to 1.4% in June 2024 from 0.0% in May 2024. Further, Non-Food inflation (Y-o-Y) accelerated to 1.8% in June 2024 from 1.3% in May 2024. On a month-on-month basis, inflation increased marginally after declining for 3 consecutive months. Accordingly, the monthly percentage increase of CCPI was 0.77% in June 2024. Meanwhile, core inflation (Y-o-Y), which reflects the underlying inflation trends in the economy, accelerated to 4.4% in June 2024 from 3.5% in May 2024.
Based on the available data, inflation is expected to remain below the target of 5%, in the near term. Over the medium term, inflation is expected to align with and remain around the target level, supported by suitable policy interventions.
