Sri Lanka’s annual inflation climbs to 6.8% in June as food and non-food prices rise

By The Pulseline News Desk

Sri Lanka’s annual inflation gathered pace in June 2026, with the overall rate measured by the Colombo Consumer Price Index (CCPI) rising to 6.8% on a year-on-year basis, as households continued to face increasing costs for both essential food items and non-food goods and services.

The latest figures released by the Department of Census and Statistics (DCS) showed inflation rising from 5.5% in May, marking the second consecutive month of accelerating price growth.

Food inflation recorded a significant increase, climbing to 3.6% in June from 0.9% a month earlier, signalling a rebound in the prices of key consumer staples after remaining relatively subdued in recent months.

At the same time, non-food inflation rose to 8.4%, up from 7.0% in May, reflecting continued price increases in sectors including housing, utilities, transport, healthcare, education and other consumer services.

The latest data suggest that inflationary pressures are becoming more broad-based, with price increases extending beyond food to a wider range of goods and services that directly affect household budgets.

Sri Lanka experienced an unprecedented surge in inflation during the country’s economic crisis in 2022, when soaring fuel, food and commodity prices, coupled with severe shortages and a sharp depreciation of the rupee, pushed inflation to record highs. As economic conditions gradually stabilised following fiscal reforms, tighter monetary policy and support from the International Monetary Fund (IMF), inflation eased sharply through 2023 and 2024, with the country even experiencing periods of deflation as domestic demand remained weak.

However, economists have cautioned that the low inflation seen over the past year was unlikely to persist indefinitely. The gradual recovery in domestic economic activity, adjustments to administered prices, exchange rate movements and changes in taxes have all contributed to renewed upward pressure on prices.

The Central Bank of Sri Lanka (CBSL) has previously indicated that inflation is expected to move towards its medium-term target as economic activity strengthens, while maintaining that monetary policy decisions will remain data-dependent to ensure price stability.

The June inflation figures are therefore likely to be closely watched by policymakers, businesses and financial markets for indications of the future direction of interest rates and the broader pace of Sri Lanka’s economic recovery.

Despite the pickup in inflation, the current rate remains significantly below the triple-digit levels experienced during the peak of the economic crisis, suggesting that while price pressures have returned, they remain far more moderate than those seen just a few years ago.