SRI LANKA INFLATION RISES TO 2.7% IN APRIL FROM 2.5% IN MARCH

Sri Lanka's consumer price inflation rose to 2.7% in April from 2.5% in March. The National Consumer Price Index (NCPI) captures broad retail price inflation and is released with a lag of 21 days every month. Food prices rose 3.3% in April from 5% in March. Prices for non-food items rose 2.3% in April from 0.7% in March, as the impact of a 22% reduction in power tariffs for households implemented in March wore off.

Overall inflation is unlikely to change significantly in the next three months, analysts said, due to expectations that global oil prices and local demand-side pressures will remain subdued. Inflation will remain within the Central Bank of Sri Lanka’s (CBSL) target of 5%.“Inflation might increase slightly because of higher food prices in the months ahead. So we might see inflation hitting 4%-4.5% but nothing to worry too much about," said Dimantha Mathew, head of research at First Capital. Sri Lanka racked up record high inflation that peaked at 70% in September 2022 after its economy was crushed by the worst financial crisis in decades, triggered by a severe plunge in foreign exchange reserves.

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