Headline inflation in Sri Lanka, as measured by the Colombo Consumer Price Index, dropped to minus 4 percent in January. The year-on-year inflation was recorded at minus 1.7 percent in December. According to data released by Sri Lanka’s Department of Census and Statistics, inflation has remained in negative territory for five months.

Non-food inflation has been recorded to have contributed more as it dropped to minus 4.7 percent while food inflation was recorded at minus 2.6 percent. Earlier on Wednesday, the Central Bank, in the first monetary policy review of 2025, had said that inflation is expected to remain in negative territory for a few months before moving towards the targeted 3-5% range. Governor of CBSL, Dr. Nandalal Weerasinghe, had said that the easing of electricity tariff reduction will contribute to deflation.