Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) increased to 4.0% in December2023 from 3.4% in November 2023. This increase in the headline inflation is mostly in line with the projections envisaged by the Central Bank of Sri Lanka (CBSL) in November 2023. 

After five months of continuous deflation, the Food category recorded inflation (Y-o-Y) of 0.3% in December 2023 from 3.6% deflation (Y-o-Y) recorded in November 2023. Meanwhile, the Non-Food inflation (Y-o-Y) declined to 5.8% in December 2023 from 6.8% in November 2023. Monthly change of CCPI recorded 0.89% in December 2023 due to the combined effect of price increases of 1.16% observed in items of Food category and price decreases of 0.27% observed in the items of Non-Food category. The core inflation (Y-o-Y), which reflects the underlying inflation in the economy, decreased to 0.6% in December 2023 from 0.8% in November 2023

The trade deficit narrowed in November 2023, compared to a year earlier and October 2023, as a combined impact of an improvement in exports and a compression in imports. Exports recorded a year-on-year growth for the first time since September 2022.

Monthly workers’ remittances continued to exceed US dollars 500 million and recorded a notable increase in November 2023 compared to the corresponding period in 2022.

Tourist arrivals soared during the festive season, contributing to high earnings from tourism.