Generally what were talked about earlier are continued price hikes of the normal consumer goods in Sri Lanka or Inflation.

However, the Government’s latest data indicates that what is witnessed in Sri Lanka currently is in fact a ‘Deflation’.

Accordingly, during September this year, when compared to September of 2014, the consumer prices in Sri Lanka have dropped by 0.3 per cent, making it the third consecutive month for this deflation.

While deflation is not a satisfactory situation economically, this may lead to unemployment, drop in investments etc.

Hence, the Central Bank is engaged in a two-pronged effort to control inflation as well as deflation.