Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100)1 was recorded at 2.4% in July 2024. Inflation continued to remain below the targeted level of 5% even after this acceleration.
Food inflation (Y-o-Y) accelerated marginally to 1.5% in July 2024 from 1.4% in June 2024. Further, Non-Food inflation (Y-o-Y) also accelerated to 2.8% in July 2024 from 1.8% in June 2024.
On a month-on-month basis, the CCPI recorded a decline of 0.44% in July 2024 due to the combined effect of price increases of 0.03% observed in the items of the Food category and the price decreases of 0.47% observed in the items of the Non-Food category. Meanwhile, core inflation (Y-o-Y), which reflects the underlying inflation trends in the economy, remained unchanged at 4.4% in July 2024.
Inflation is projected to remain below the target of 5% in the near term. Over the medium term, inflation is expected to gradually align with and remain around the targeted level, aided by appropriate policy measures.