Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100)1 increased to 1.5% in October 2023 from 1.3% in September 2023. This slight increase in the headline inflation is mostly in line with the projections envisaged by the Central Bank of Sri Lanka (CBSL) in October 2023.

The Food deflation (Y-o-Y) continued for the fourth consecutive month and remained unchanged at 5.2% in October 2023 compared to the previous month. Meanwhile, the Non-Food inflation (Y-o-Y) increased to 4.9% in October 2023 from 4.7% in September 2023. Monthly change of CCPI recorded at -0.22% in October 2023 due to the combined effect of price decreases of -0.63% observed in the items of Food category and price increases of 0.41% recorded in the items of Non-Food category. The core inflation (Y-o-Y), which reflects the underlying inflation in the economy, decreased to 1.2% in October 2023 from 1.9% in September 2023.

Merchandise trade deficit widened in September 2023 due to the combined impact of relatively low export earnings and high import expenditure, compared to September 2022. The cumulative trade deficit during January to September 2023 continued to remain significantly low. 

Workers’ remittances and earnings from tourism recorded significant improvements in September 2023, compared to the corresponding period of the previous year. 

Tourist arrivals recorded over one million during the nine months of ending September 2023.

Foreign investments in the government securities market recorded a lower net outflow during September 2023, compared to the previous months.

Gross Official Reserves amounted to US dollars 3.5 billion by end September 2023.

The Sri Lanka rupee exhibited some volatility against the US dollar during the month of September 2023.

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