Inflation, as measured by the change in the National Consumer Price Index (NCPI) (2013=100), which is compiled by the Department of Census and Statistics (DCS), increased to 8.6 per cent in September 2017 from 7.9 per cent in August 2017, on year-on-year basis. Both Food and Nonfood categories contributed towards the year-on-year inflation in September 2017.

The change in the NCPI measured on an annual average basis increased from 6.5 per cent in August 2017 to 6.8 per cent in September 2017.

The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the findings so far, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

• The 2018 budget should continue fiscal consolidation, supported by the new Inland Revenue Act. 
• Monetary policy should remain vigilant to pressures on inflation and credit growth.
• Upholding the reform momentum is key to addressing vulnerabilities and sustaining inclusive growth.

After constructive discussions with the authorities in Colombo and during the Annual Meetings, an IMF staff team issued the following statement in Washington DC: