Colombo Consumer Price Index up 1.6%

Sri Lanka’s Colombo Consumer Price Index rose 1.6% year-on-year ​in February, after a 2.3% rise in January, the Statistics Department said.

The Colombo Consumer Price Index, a leading indicator for broader national prices, tracks inflation in Colombo, Sri Lanka’s biggest city.

The annual inflation rate ‌in the food ‌category slowed sharply to ​0.2% ‌this ⁠month ​from 3.3% ⁠in January. In the non-food category, however, consumer prices rose by 2.3% in February, up from 1.8% in January.

The island nation, which has been emerging from its worst economic crisis in decades ⁠that peaked in 2022, was ‌hit by a ‌severe cyclone in late ​November that killed ‌650 people.

Torrential rain and floods caused $4.1 ‌billion in damage to crops and infrastructure, according to World Bank estimates.

But the Central Bank of Sri Lanka (CBSL) expects inflation to ‌remain subdued and only reach its 5% target in the second ⁠half ⁠of 2026, a view shared by many analysts.

“We expect inflation will remain subdued for most of this year and reach the central bank’s target towards the third or fourth quarter of 2026,” said Dimantha Mathew, head of research at First Capital.

The CBSL predicts economic growth of between 4% and 5% for ​2026, above ​the 2.9% forecast by the International Monetary Fund.