Tuesday, 01 October 2024 08:30

Sri Lanka Records Deflation for First Time Since 2015 Featured

The Central Bank of Sri Lanka announced that headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index, entered negative territory in September 2024. This marks the first instance of deflation since September 2015, with a recorded deflation rate of 0.5%.

The food category experienced a Y-o-Y deflation of 0.3% in September 2024, a significant shift from the 0.8% inflation recorded in August 2024. Similarly, the non-food category also saw a Y-o-Y deflation of 0.5% in September 2024, compared to the 0.4% inflation in the previous month.

The Colombo Consumer Price Index fell almost continuously from March 2024, except June when the currency also came under pressure from excess liquidity from dollar purchases.

Sri Lanka’s central bank has produced almost no inflation for 24 months since September 2024, when its deflationary policy began to show up in the balance of payments.

 

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