Saturday Oct 31, 2026
Saturday Oct 31, 2026
Saturday, 31 October 2026 00:09 - - {{hitsCtrl.values.hits}}
Sri Lanka’s Colombo Consumer Price Index (CCPI)-based headline inflation accelerated to 8.3% year-on-year (YoY) in October from 8% in September, rising above the three-year high recorded in the previous two months and staying above the Central Bank of Sri Lanka’s (CBSL) 5% ±2% target band for a fourth consecutive month.
Headline inflation has risen from 7.3% in July, when it first breached the upper limit of the band, and from 2.1% in October 2025.
In a statement yesterday, the CBSL said food inflation rose marginally to 8.8% in October from 8.7% in September, while non-food inflation increased to 8% from 7.7%.
On a month-on-month basis, the CCPI rose 0.35% in October, up from 0.19% in September. The non-food category contributed 0.33 percentage points, largely owing to higher prices in the restaurants and hotels category, while food contributed a marginal 0.02 percentage points.
Among subcategories, transport inflation rose to 17.6% from 16.3% and restaurants and hotels to 13.4% from 11.5%. Health inflation eased to 2.6% from 4%.
Core inflation, which strips out volatile items such as food and energy, accelerated to 5.6% YoY in October from 5.4% in September and 5.1% in August. Annual average headline inflation rose to 5% from 4.5%.
According to projections made at the September monetary policy round, headline inflation is expected to remain in high single digits through the first quarter of 2027 before easing towards the 5% target, and to remain around the target over the medium term. The CBSL said the projections are conditional on, among other assumptions, the effects of tensions in the Middle East and their spillovers gradually dissipating.
The 5% target, first agreed under the Monetary Policy Framework Agreement (MPFA) between the CBSL and the Minister of Finance in October 2023, was retained under a new MPFA signed this month.
