The Central Bank of Sri Lanka (CBSL) says that the latest forecasts have actually shown deeper deflation than previously forecasted, generally due to the more than anticipated down modification in the electricity tariff revealed in January 2025.
Inflation is expected to turn favorable from mid-2025 and assemble towards the targeted level of 5 percent over the medium term, supported by proper policy adjustments, it said.Accordingly, heading inflation, as measured by the year-on-year change in the Colombo Consumer Price Index (CCPI), remained in the negative territory for the fourth consecutive month in December 2024.
This was primarily driven by the previous down modifications to electrical energy tariffs and domestic fuel rates, in the middle of subdued need pressures.Latest projections suggest much deeper deflation than formerly forecasted, mainly due to the more than expected downward adjustment in the electrical energy tariff announced in January 2025.
Inflation is expected to turn favorable from mid-2025 and assemble towards the targeted level of 5 per cent over the medium term, supported by proper policy modifications.
Core inflation, which is presently in lower positive levels, is predicted to slow down further over the next few months, before changing upwards afterwards.