Inflation to hit 70% mark

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Nandalal Weerasinghe

Sri Lanka’s headline inflation is expected to skyrocket. Governor of the Central Bank of Sri Lanka, Dr. Nandalal Weerasinghe said that inflation could increase from the current 50% mark to 70% in the coming months.

Announcing the Central Bank’s 05th monetary policy review for the year 2022 Governor Nandalal Weerasinghe said the Central Bank is focusing on the most vulnerable groups and working towards sustainable social safety net programs such as Samurdhi.

According to the Central Bank, in June headline inflation was driven to 54.6 %, due to increases in the cost-driven mainly by inflation in transport, restaurant and hotel, food and non-alcoholic beverages. In the month of June, overall food inflation was recorded at 80.1 %, while non-food inflation was at 42.4 %.

The Governor said that global energy and food price hikes, as well as internal factors such as domestic supply-side disruptions, the impact of the depreciation of the rupee, tax adjustments, and the lagged impact of monetary accommodation, have created an inflation hike.

The Governor warned that as a result of the inflation hike, small and medium-scale businesses that have taken loans will face difficulties in honoring their debt.

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