CCPI inflation hits three-year high of 8% in August

Tuesday, 1 September 2026 03:02 - - {{hitsCtrl.values.hits}}

Inflation exceeds CBSL’s 5% ±2% target band for second straight month
CBSL expects inflation to remain above 5% target in near term before easing

Sri Lanka’s Colombo Consumer Price Index (CCPI)-based headline inflation accelerated to a three-year high of 8% year-on-year (YoY) in August from 7.3% in July, exceeding the Central Bank of Sri Lanka’s (CBSL) 5% ±2% inflation target band for a second consecutive month and intensifying scrutiny over its ability to steer inflation back towards target.

In a statement yesterday, the CBSL attributed the acceleration primarily to the statistical base effect in food inflation.

Food inflation increased to 8.5% in August from 6.3% in July, contributing mainly to the increase in headline inflation, while non-food inflation eased marginally to 7.7% from 7.8%.

CCPI inflation...

On a month-on-month basis, the CCPI increased by 0.28% in August. The food category contributed 0.20 percentage points to the increase, largely owing to higher milk powder prices, while the non-food category contributed 0.07 percentage points.

Core inflation accelerated to 5.1% YoY in August from 4.4% in July.

The CBSL said its projections made during the July monetary policy round indicated that headline inflation would remain above the 5% target in the near term before easing and stabilising around the target over the medium term, supported by policy measures.

The projections are conditional, among other assumptions, on the effects of tensions in the Middle East and their spillovers being temporary and gradually dissipating.

The CCPI, with 2021 as its base year, is compiled by the Department of Census and Statistics and measures average changes in prices of goods and services purchased by households in urban areas of the Colombo District.