Colombo Consumer Price Index up 2.2%

Sri Lanka’s Colombo Consumer Price Index rose 2.2% year-on-year in March, ​after February’s rise of 1.6%, the Statistics Department said.

The Colombo Consumer Price Index, a leading indicator of broader national price levels, tracks inflation in the island nation’s largest city.

The annual inflation rate in the food category increased to 0.7% ‌this month ‌from 0.2% in February. ​In ‌the ⁠non-food ​category, consumer prices ⁠rose 2.3% last month, versus 2.9% in February.

Sri Lanka, which imports all its fuel, is struggling with the fallout from the Middle East crisis, which has driven up fuel prices by about 35% in March.

It also raised ‌power tariffs for ‌most households by 7.2%, ​and industries by 8.7% ‌on Monday, with the power regulator ‌warning more hikes could be in store if energy prices continue to climb.

“With the new energy prices, we may see inflation increase to ‌about 3.3% across the next couple of months,” said Dimantha Mathew, research ⁠head ⁠at First Capital.

The Central Bank of Sri Lanka (CBSL) kept its key policy rate unchanged at 7.75% last week but warned that inflation was increasing faster and would reach 5% in the year’s second quarter.

A delegation from the International Monetary Fund (IMF) is visiting Colombo to review the fifth and sixth tranches of a $2.9-billion ​program that would ​release about $650 million to Sri Lanka.