CCPI spikes again in June to three-year high 6.8%

Wednesday, 1 July 2026 00:00 - - {{hitsCtrl.values.hits}}

Headline inflation, as measured by the year-on-year (YoY) change in the Colombo Consumer Price Index (CCPI), continued to spike in June as expected due to the impact of the Mideast war.

The Central Bank of Sri Lanka (CBSL) yesterday said headline inflation YoY accelerated to a three-year high 6.8% in June 2026, up from 5.5% in May and 5.4% in April. The rate of inflation was 2.2% in March and 1.6% in February, which was lower than 2.3% in January, after remaining stable at 2.1% in October, November, and December 2025.

CBSL raised the monetary policy rate towards the end of May for the first time since 2023 in a bid to contain credit growth led import demand. It has a 5% inflation target with a margin of ±2 percentage points that it must adhere to by law.

CBSL said non-food inflation (YoY) accelerated to 8.4% in June 2026 from 7.8% in May 2026, contributing mainly to the increase in headline inflation. Food inflation (YoY) also accelerated to 3.6% in June 2026 from 0.9% in May 2026.

On a month-on-month basis, the CCPI recorded an increase of 2.1% in June 2026. This increase was driven by the food category, which contributed 1.4 percentage points, largely owing to the increase in prices of fish and vegetables, while the non-food category contributed 0.7 percentage points.

Meanwhile, core inflation (YoY) accelerated marginally to 4.0% in June 2026 from 3.9% in May 2026.

CBSL said the realised quarterly average inflation for Q2-2026 remained broadly in line with the Central Bank’s recent inflation projections. Inflation projections made at the monetary policy round in May 2026, based on available information and assumptions, indicate that headline inflation is likely to remain above the target of 5% in the period ahead, before easing and stabilising around the target over the medium term, supported by appropriate policy measures.

However, amid the fluid nature of the tensions in the Middle East and the wide-ranging spillovers across both global and domestic economic activity, the domestic inflation outlook remains subject to elevated uncertainty, CBSL noted.