Thursday Jun 04, 2026
Thursday Jun 04, 2026
Monday, 1 June 2026 00:22 - - {{hitsCtrl.values.hits}}
Headline inflation, as measured by the year-on-year (YoY) change in the Colombo Consumer Price Index (CCPI), spiked in May as expected due to the impact of the Mideast war.
The Central Bank of Sri Lanka (CBSL) last week said headline inflation YoY accelerated to 5.5% in May at a faster pace compared to 5.4% in April, 2.2% in March, and 1.6% in February, which was lower than 2.3% in January.
Inflation was stable at 2.1% in October, November, and December 2025.
Food inflation YoY decelerated sharply to 0.9% in May from 2.8% in April, 0.7% in March, and 0.2% in February, but remained relatively lower than 3.3% in January and 3% in December 2025.
Non-food inflation YoY accelerated to 7.8% in May, up from 6.8% in April, up significantly from 2.9% in March, and up from 2.3% in February and 1.8% in January.
On a month-on-month (M-o-M) basis, the CCPI recorded an increase of 0.9% in May, a sharp increase from 2.99% in April and 0.25% in March, and compared to a 0.85% decrease in February.
The May increase was driven by the non-food category, which contributed 0.6 percentage points, largely owing to the increase in prices of the housing, water, electricity, gas and other fuels, and transport subcategories, while the food category contributed 0.3 percentage points, the CBSL said.
In April, the non-food category contributed 2.43 percentage points, also due to higher transportation costs, while the food category contributed 0.56 percentage points to the M-o-M CCPI increase.
Core inflation YoY accelerated to 3.9% in May, increasing from 3.8% in April, 2.5% in March, and 2.1% in February.
“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. Inflation projections made at the monetary policy round in May 2026 based on currently 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,” the CBSL said.
In March, the CBSL had forecast inflation to reach the target of 5% in the second quarter of 2026, earlier than previously anticipated.
