Colombo consumer price index drops

Sri Lanka’s Colombo consumer price index was down 2% year-on-year in April after dropping 2.6% in March, 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.

Prices in the food category rose 1.3% year-on-year in April from 0.6% year-on-year in March. In the non-food category, prices fell by an annual 3.6% this month after declining 4.1% in March.

“With oil prices coming down, we are likely to see inflation remain in negative territory for the next couple of months,” said Shehan Cooray, head of research at HNB Stockbrokers.

“It is becoming harder to predict when inflation will reach positive territory but this is in line with our current expectations.”

Sri Lanka, which was plunged into a financial crisis by a record shortage of dollars three years ago, has recovered strongly, posting 5% growth last year.

The island nation’s inflation has fallen significantly over the last two years, supporting a gradual lowering of interest rates.

Inflation is expected to track closer to the central bank’s target of 5% towards the end of 2025, the central bank said in a statement last month.