The Central Bank of Sri Lanka wishes to clarify a misreporting of the views expressed by Governor of the Central Bank following a recent media engagement. Such media reports claim that ‘Governor anticipates a difficult period ahead in the economy’. This is a gross misinterpretation of the views expressed by Governor, taken out of the context of the discussion on challenges that the economy could face in the period ahead if the envisaged reforms are delayed or derailed. Governor viewed that the difficult and painful policy measures implemented by the Government and the Central Bank thus far have helped to stabilise the economic conditions, compared to the unprecedented socio-economic tensions witnessed in 2022. Despite these reforms have resulted in significant adjustment costs, causing hardship to the people and businesses in the near term, they were necessary to restore stability, which will accrue benefits to the people and businesses in the period ahead.

Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100)  decreased to 50.3% in March 2023 from 50.6% in February 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 2023.

The Food inflation (Y-o-Y) decreased to 47.6% in March 2023 from 54.4% in February 2023, whereas the Non-Food inflation (Y-o-Y) increased to 51.7% in March 2023 from 48.8% in February 2023. Monthly change of CCPI recorded at 2.92% in March 2023 due to price increases observed in items of Non-Food category, which was 3.71%. However, the Food category recorded a monthly decline of 0.79%. The core inflation (Y-o-Y), which reflects the underlying inflation in the economy, decreased to 39.1% in March 2023 from 43.6% in February 2023.