Sri Lanka Feb. average annual inflation rate rises 0.5% y/y

Sri Lanka Feb. average annual inflation rate rises 0.5% y/y

Sri Lanka’s Annual Inflation Rate Hits 2.1% in November 2025, Driven by Food and Non-Food Price Pressures

The annual inflation rate in Sri Lanka’s capital, Colombo, remained at 2.1% in November 2025, marking its highest level since July 2024 but falling short of market expectations of 2.5%. This follows a steady rise over the preceding three months, with October's year-on-year increase accelerating to 2.1% from 1.5% in September. The uptick reflects persistent inflationary pressures in both food and non-food categories, despite broader economic recovery efforts.

Food prices contributed 0.95 percentage points to the annual inflation increase, with coconuts (+0.63 pp), milk powder (+0.26 pp), and limes (+0.34 pp) as key drivers. Declines in rice, eggs, and sugar partially offset these gains. Non-food categories added 1.14 percentage points, led by rising costs in education (+0.27 pp), housing rent (+0.22 pp), and restaurant services (+0.25 pp). Conversely, electricity (-0.20 pp) and petrol (-0.21 pp) exerted downward pressure on the overall rate.

On a monthly basis, consumer prices fell 0.2% in November, reversing a 0.1% rise in October. This follows a 0.1% monthly increase in October and a 0.4% decline in August, highlighting volatility in short-term price movements.

The inflation trajectory aligns with Sri Lanka’s broader economic recovery, as GDP grew 4.9% in Q2 2025, supported by a 21.5% year-on-year rise in tourist arrivals and a widening current account surplus. The Central Bank has maintained its policy rate at 7.75% since at least November 2025, signaling a cautious approach amid inflationary risks and growth momentum.

While annual inflation remains below pre-2024 peaks, the sustained rise in food and service costs underscores ongoing challenges for households and policymakers as the economy navigates post-crisis normalization.

(https://tradingeconomics.com/sri-lanka/inflation-cpi): Trading Economics, November 2025 data.
(https://tradingeconomics.com/sri-lanka/inflation-cpi): Trading Economics, October and September 2025 data.