Sri Lanka ends 2025 with inflation at 2.1%, as food prices spike in Dec

Sri Lanka
By Editor_1
Sri Lankan rupees seen in a bowl at a vegetable vendor's shop in Colombo, Sri Lanka, on July 29, 2022. Sri Lanka’s inflation stood at 2.1% in the 12 months to December 2025, while consumer prices rose 1.2% month-on-month, according to data released by the Department of Census and Statistics - /Kim Kyung-Hoon/Reuters/File

COLOMBO – Sri Lanka’s inflation stood at 2.1% in the 12 months to December 2025, while consumer prices rose 1.2% month-on-month, according to data released by the Department of Census and Statistics.

The Colombo Consumer Price Index (CCPI), the country’s main inflation gauge, increased to 195.8 points in December, up from 193.4 points in November, reflecting a modest uptick in prices toward the end of the year.

Despite the December rise, Sri Lanka’s overall price levels have remained relatively subdued over the medium term. Consumer prices have increased by just 3.4% over the 39 months since September 2022, a period that marked the beginning of a sharp policy shift aimed at stabilizing the balance of payments following the country’s worst economic crisis.

Data show that prices declined in absolute terms during the early part of 2025, with the CCPI falling from 192.6 points in January to 191.2 points by April. The index began to edge up gradually in subsequent months, coinciding with a depreciation of the rupee in the second half of the year.

By year-end, the Sri Lankan rupee had weakened to around LKR 309.50/60  to the US dollar, reflecting currency pressures amid selective convertibility and increased dollar purchases by the central bank. Analysts have noted that these pressures emerged even as domestic price growth remained contained.

Globally, inflationary conditions have been relatively stable, supported by broadly tight monetary conditions in major economies. The US Federal Reserve maintained a largely deflationary policy stance through most of the year, though this was eased following its most recent rate cut.

Sri Lanka’s low headline inflation in 2025 comes as the country continues to navigate a fragile recovery under an IMF-supported program, balancing price stability with pressures from currency movements, disaster-related spending, and efforts to revive economic growth.

-ENCL

Editor_1
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