The Central Bank of Sri Lanka (CBSL) states that the increase in transportation costs can be considered as a major reason for the increase in inflation this year (2026).
According to data compiled by the Department of Census and Statistics, the CBSL announces that the headline inflation measured by the Colombo Consumer Price Index (CCPI 2021=100) has increased in March 2026.
According to data of the Department of Census and Statistics, the annual point inflation, which was recorded at 1.6 percent in February, has increased to 2.2 percent by March.
This inflation increase has been influenced by price increases in both food and non-food categories. On an annual point basis, food inflation has increased to 0.7 percent in March from 0.2 percent in February. Similarly, non-food inflation has also increased from 2.3 percent to 2.9 percent. On a monthly basis, the Colombo Consumer Price Index (CPI) increased by 0.25 percent in March 2026. This was mainly due to the increase in prices in the transport sub-category. The non-food category contributed 0.52 percentage points to the monthly increase, while the food category contributed -0.27 percentage points to the increase.
Core Inflation, which reflects the underlying inflationary trends in the economy, has also increased from 2.1 percent in February to 2.5 percent in March. The Central Bank points out that the inflation levels reported for the first quarter of 2026 are broadly in line with their recent forecasts.
Based on the latest data and assumptions, inflation is projected to reach the 5 percent target level by the second quarter of 2026, faster than previously expected. Thereafter, inflation is expected to be stabilised around that level through appropriate policy measures.
However, the Central Bank emphasizes that there is a high degree of uncertainty about the future inflation outlook due to the ongoing political crises in the Middle East region and changes in global and domestic economic activity. The reports further indicate that if these conditions change significantly, inflation could deviate from the projected values.
Source : Daily News
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