Sri Lanka’s inflation rate has dipped to an impressive -1.7% in November, following a -0.7% drop in October, marking a clear sign of recovery after the nation’s worst financial crisis in decades. The latest data, released on Monday, reveals that food prices remained stable at 0.0%, down from 1.3% the previous month, while non-food prices saw a notable decline of -3.1%, improving from -2.3% in October.
This positive shift is attributed to several factors, including reductions in power tariffs, fuel prices, and the strengthening of the Sri Lankan rupee. The country’s inflation rate is now at its lowest in nine years, signaling a much-needed economic stabilization.
Experts predict that inflation will remain relatively low through the early months of 2025, although potential foreign exchange pressures, especially from rising vehicle imports, could gradually push inflation up. Nevertheless, it is expected to stay under control, with rates unlikely exceeding 4%.
Following a devastating inflation surge in 2022, caused by a financial crisis, Sri Lanka secured a $2.9 billion bailout from the IMF in March 2023. The country’s economy is projected to grow by 4.5-5% in 2024, slightly exceeding the World Bank’s forecast, showing strong momentum towards recovery.
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