In Sri Lanka, Inflation as measured by the Colombo Consumer Price Index (CCPI) has further decreased to -4.2% in February this year.

According to the Department of Census and Statistics, inflation was recorded at -4.0% in January 2025. The crisis-stricken island has witnessed sharp deflation due to the tight monetary stance adopted by the Central Bank. The inflation has been in the negative zone for the last six months, however, the Central Bank expects the inflation to gradually rise by mid-year and move towards the target of 5%.

At the peak of the crisis in 2022, Sri Lanka had witnessed runaway inflation hitting 70%, coupled with acute shortages in forex leading to short supplies of essentials.