Sri Lanka inflation breaches CB’s upper target band for second straight month in August
COLOMBO – Sri Lanka’s overall rate of inflation, as measured by the Colombo Consumer Price Index (CCPI), rose to more than three-year high of 8.0% in August 2026 from 7.3% in the previous month, breaching the Central Bank’s upper inflation target rate of 7% for the second month, data from the state statistics office showed.
The CCPI for all items in August 2026 stood at 208.8, recording an increase of 0.6 index points or 0.28% compared to 208.2 in July 2026.
“This represents an increase in expenditure value of Rs 526.15 in the market basket,” the Department of Census and Statistics said in a statement.
The island nation’s economy witnessed upward price adjustments after the government raised fuel prices by nearly 50% following a supply shortage due to Middle East escalation, amid higher global oil prices.
Year-on-year food inflation accelerated to 8.5% in August 2026, its highest since May 2023 and rising from 6.3% in July 2026, contributing mainly to the increase in headline inflation.
Non-food inflation, year on year, rose to 7.7% in August 2026, easing from 7.8% in July 2026.
Core inflation, year on year, accelerated to 5.5% in August 2026 from 4.4% in the previous month.
The Central Bank kept its Overnight Policy Rate steady in its last monetary policy meeting.
The Central Bank Governor expects the inflation to ease to 5% towards the end of the year if the average global oil prices remain around US$80 per barrel.
-economynext.com
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