Sri Lanka’s Deflation Slows in June – Inflation Set to Rise

COLOMBO (News 1st); Sri Lanka’s deflationary trend continued to ease in June 2025, signaling a potential shift toward positive inflation in the coming months, according to the latest data from the Central Bank of Sri Lanka.

The Colombo Consumer Price Index (CCPI) recorded a year-on-year (Y-o-Y) headline deflation of 0.6% in June, slightly lower than the 0.7% deflation observed in May. 

The monthly CCPI increased by 0.9%, driven primarily by the Food category, which contributed 0.62 percentage points, while Non-Food items added 0.28 percentage points.

Notably, core inflation, which excludes volatile items and reflects underlying price trends, rose to 1.5% in June from 1.2% in May, indicating a gradual pickup in inflationary momentum.

Sector Highlights:

Food inflation (Y-o-Y) moderated to 4.3% from 5.2% in May.

Non-Food deflation decelerated to 2.8% from 3.3%.

Quarterly average headline inflation for Q2 2025 aligned with Central Bank projections.

Inflation is expected to turn positive and gradually align with the target rate of 5%.

The Central Bank emphasized that appropriate policy measures will support this transition.