COLOMBO: Sri Lanka’s consumer prices fell by 4.0 percent in January, the highest deflation rate since July 1960, official data showed Friday, as the South Asian nation emerges from its worst economic meltdown.
January was the fifth consecutive month of deflation, according to the Colombo Consumer Price Index.
Inflation hit a record 69.8 percent in September 2022 at the height of the country’s economic crisis, which saw months of widespread consumer goods shortages.
Officials said sharp reductions in electricity and fuel costs contributed to the sharp fall in prices in January, but the central bank forecasts annual inflation in 2025 to be around 5.0 percent.
Sri Lanka central bank holds key policy rate steady as budget looms
Sri Lanka secured a $2.9 billion bailout loan from the International Monetary Fund (IMF) after the 2022 crash.
President Anura Kumara Dissanayake, elected last year, has vowed to maintain the IMF bailout programme negotiated by his predecessor that includes higher taxes and cuts to state spending.
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