Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) decreased to 50.6% in February 2023 from 51.7% in January 2023. The decline in the headline inflation is broadly in line with the disinflation path envisaged by the Central Bank of Sri Lanka (CBSL) in January 2023.
The Food inflation (Y-o-Y) decreased to 54.4% in February 2023 from 60.0% in January 2023, whereas the Non-Food inflation (Y-o-Y) increased to 48.8% in February 2023 from 47.9% in January 2023. Monthly change of CCPI recorded at 0.47% in February 2023 due to price increases observed in items of Non-Food category, which was 1.20%. However, the Food category recorded a monthly decline of 0.74%. The core inflation (Y-o-Y), which reflects the underlying inflation in the economy, decreased to 43.6% in February 2023 from 45.6% in January 2023.
Looking ahead, based on the latest macroeconomic projections of the CBSL and available information, the anticipated declining trend of inflation is expected to continue through 2023, supported by subdued demand conditions owing to tight monetary and fiscal policy measures, and anticipated improvements in domestic supply conditions, along with the favourable statistical base effect.