Sri Lanka’s inflation rises to 7.2% in July as food prices accelerate

By The Pulseline News Desk

Sri Lanka’s inflation rate increased to 7.2% in July, up from 6.5% in June, as rising food prices added fresh pressure on household budgets, according to the Department of Census and Statistics (DCS).

The latest figures, released under the National Consumer Price Index (NCPI), indicate a broad increase in consumer prices during the month, with food inflation recording a notable acceleration.

Food inflation rose to 4.9% in July from 3.3% in June, marking a 1.6 percentage-point increase. The rise suggests that food prices are once again becoming a stronger contributor to overall inflation after recording a more moderate increase in the previous month.

The increase comes amid continued pressure on household expenses, particularly for consumers who allocate a significant share of their income to food and other essential items.

In contrast, inflation in the non-food category eased marginally to 9.2% in July from 9.3% in June.

Despite the slight decline, non-food inflation remained considerably higher than food inflation, indicating continued price pressure across categories such as housing, utilities, transport and other consumer goods and services.

The July figures therefore point to a shift in the composition of inflation, with the acceleration in food prices contributing to the overall increase while non-food price pressures remained elevated but relatively stable.

The latest increase also comes as Sri Lanka continues to navigate the economic recovery following the severe economic crisis of recent years. While inflation has come down significantly from the exceptionally high levels recorded during the crisis, the renewed acceleration highlights the continuing sensitivity of household costs to movements in food and other essential prices.

For consumers, the rise in headline inflation is likely to translate into continued pressure on purchasing power, particularly if food prices maintain their upward trend in the coming months.

The latest data will also be closely watched by policymakers as they assess the direction of domestic prices and the broader pace of Sri Lanka’s economic recovery.