CCPI breaches CBSL upper-limit, rises to three-year high 7.3% in July

Saturday, 1 August 2026 01:05 - - {{hitsCtrl.values.hits}}

Headline inflation measured by the Colombo Consumer Price Index (CCPI accelerated to 7.3% in July, breaching the upper limit of the Central Bank’s 5% ±2 percentage point inflation target range, as non-food price pressures outweighed a moderation in food inflation.

The Department of Census and Statistics (DCS) yesterday said the year-on-year Colombo Consumer Price Index (CCPI) inflation rate increased to 7.3% in July from 6.8% in June, while the index rose to 208.2 from 207.7.

This is also a three year high after inflation eased from 12% in June 2023 to 6.3% in July 2023.

Food inflation eased to 6.3% in July from 6.8% in the previous month. However, non-food inflation accelerated to 7.8% from 7.4%, contributing to the increase in headline inflation.

On a monthly basis, the CCPI increased by 0.2%, with food prices contributing 0.01 percentage points and non-food prices 0.23 percentage points to the increase.

Core inflation, which excludes the volatile food, energy and transport categories, stood at 4.4% year-on-year in July, while core prices increased 0.8% from the previous month.

Among the major expenditure categories, transport recorded year-on-year inflation of 17.2%, education 7.2%, non-food items 7.8% and housing, water, electricity, gas and other fuels 5.4%. Recreation and culture remained in deflation at negative 2.1%.

Last month, Central Bank Governor Dr. Nandalal Weerasinghe said the Monetary Board expected inflation to move towards the upper end of its 5% target range following administered price adjustments, particularly fuel prices, and responded by raising policy interest rates by 100 basis points in May.

He said inflation could increase over the following months as the impact of those one-off price adjustments filtered through the economy, but stressed that the effects were expected to be temporary and that inflation was projected to return to the 5% target once those pressures dissipated.

Dr. Weerasinghe also said the earlier policy tightening was beginning to moderate domestic demand, import growth and credit expansion, which would help contain underlying inflationary pressures.