Sri Lanka records single-digit inflation for first time in 2 years

COLOMBO: Cash-strapped Sri Lanka on Monday said that its inflation has dropped to 6.3%, a single-digit figure for the first time in two years, providing much-needed relief to the people amidst the worst financial crisis. In a statement, the Census and Statistics Office of the Sri Lankan government said that the overall rate of inflation as measured by the Colombo Consumer Price Index on a year-on-year basis is 6.3% in July 2023 and it was down from 12% recorded in June this year.

The last time single-digit inflation was recorded was 5.8% in September of 2021. The highest inflation since the island nation’s economy came under its worst crisis was 69.8% recorded in September last year.
The statement further said that the decrease in the cost of food commodities had contributed to lower inflation. Over the past 12 months, food prices fell absolutely by 1.4%, based on the index. Sri Lanka in the unprecedented forex crisis curtailed imports leading to scarcities and high prices.

But since securing the IMF bailout of $2.9 billion in March this year the relaxation of import restrictions plus action to end power shortages had improved the situation drastically. Governor of the Central Bank Nandalal Weerasinghe had said the country should record single-digit inflation by the third quarter of this year.