Colombo

After facing its worst financial crisis since Independence, Sri Lanka has recorded single-digit inflation for the first time in two years. 

Advertisment

According to a statement from the Census and Statistics Office, the Colombo Consumer Price Index, which the Sri Lankan government uses to monitor inflation, showed a year-over-year rate of 6.3 per cent in July 2023, down from 12 per cent in June this year.

“The overall rate of inflation as measured by the Colombo Consumer Price Index on a year-on-year basis is 6.3 per cent in July 2023. This was down from the 12 per cent recorded in June," the statement said. 

Sri Lanka last recorded single-digit inflation in September 2021, when it stood at 5.8 per cent. As the island nation entered its worst economic crisis, the inflation rate rose to a whopping 69.8 per cent in September 2022. 

Advertisment

According to the PTI report, the government statement noted that lower inflation was a result of a decline in the cost of food commodities. Based on the index, food prices decreased 1.4 per cent in absolute terms during the previous 12 months.

Due to the currency crisis, Sri Lanka reduced imports, which resulted in shortages and high costs. However, after the $2.9 billion IMF bailout in March this year, the government tried to resolve the recurring power crisis and lifted import restrictions. These actions significantly improved the economy situation. 

PTI quoted Nandalal Weerasinghe, the Governor of the Central Bank, as saying that the country will record inflation in single-digits in the third quarter of this financial year too.

Advertisment

(With inputs from agencies)

WATCH WION LIVE HERE