Deflation eases for fifth consecutive month in July

Friday, 1 August 2025 00:10 - - {{hitsCtrl.values.hits}}

The easing of deflationary conditions continued in July 2025, in line with the Central Bank of Sri Lanka’s (CBSL) near-term projections.

The CBSL said the deflationary conditions eased for the fifth consecutive month in July, with the year-on-year (YoY) change in the Colombo Consumer Price Index (CCPI, 2021=100) recording a milder headline deflation of 0.3%, compared to the deflation of 0.6% in June 2025.

The CBSL said food inflation YoY moderated further to 1.5% in July from 4.3% recorded in June 2025, while non-food deflation YoY continued to ease, recording 1.2% in July 2025 compared to 2.8% in June 2025.

On a month-on-month basis, the CCPI decreased by 0.23% in July 2025, for which the food category contributed -0.86 percentage points and the non-food category contributed 0.63 percentage points.

Meanwhile, core inflation YoY, which reflects the underlying inflation trends in the economy, accelerated marginally to 1.6% in July 2025 from 1.5% in June 2025.

“The latest price trends indicate that the temporary episode of deflation Sri Lanka experienced since September 2024 is about to end. Thereafter, inflation is expected to gradually accelerate towards the target of 5%, with the support of appropriate policies,” the CBSL said.