Sri Lanka inflation slightly up to 2.7% in April

Sri Lanka’s consumer price inflation edged up to 2.7 per cent in April from 2.5 per cent in March, Reuters reported, citing official data released on Tuesday.

The National Consumer Price Index (NCPI) tracks broad retail price inflation and is released with a 21-day lag.

Food prices increased by 3.3 per cent in April, up from 5 per cent in March. Non-food prices also rose to 2.3 per cent from 0.7 per cent due to the reduced impact of lower household power tariffs in March.

Analysts predict overall inflation will remain subdued in the coming months due to expectations of stable global oil prices and limited local demand pressures.

Inflation is anticipated to stay within the Central Bank of Sri Lanka’s (CBSL) target range of 5 per cent.

“Inflation might increase slightly because of higher food prices in the months ahead. So, we might see inflation hitting 4-4.5 per cent but nothing to worry too much about,” said Dimantha Mathew, head of research at First Capital.

Sri Lanka’s economy is rebounding after facing record-high inflation of 70 per cent in September 2022 during a severe financial crisis.

The economy is stabilising with the support of a $2.9 billion International Monetary Fund (IMF) programme. Growth for 2024 is expected to reach 3 per cent after two years of contraction.