Sri Lanka Inflation Rate Accelerates in March

The annual inflation rate in Colombo, Sri Lanka’s capital, rose to 2.2% in March 2026, up from 1.6% in February. Both food and non-food prices accelerated, increasing by 0.7% from 0.2% and by 2.9% from 2.3%, respectively. The increase in non-food prices was driven primarily by housing and utilities, with household power tariffs rising 7.2% amid climbing energy costs. Sri Lanka, which imports all of its fuel, has also been affected by the ongoing Middle East crisis, with fuel prices increasing by 35%. Additional contributions came from restaurants and hotels, education, health, and transport. On a monthly basis, consumer prices increased by 0.3%, following a 0.9% decline in the previous month.

Annual inflation in Colombo, Sri Lanka’s capital, slowed to 1.6% in February 2026, its lowest level in five months, after rising to 2.3% in January which was the highest since July 2024. Food prices increased 0.2%, the least in a year, compared to a 3.3% rise in January while non-food cost increased at a faster 2.3% compared to 1.8% in January. Largest upward contributions came from cost of housing and utilities, restaurants and hotels, education, health and clothing and footwear. Compared to the previous month, the CPI declined 0.9%, the most since August 2024, following a 0.6% increase in January.

Annual inflation in Sri Lanka’s capital, Colombo, rose to 2.3% in January 2026, the highest level since July 2024, up from 2.1% in December. Food inflation edged up to 3.3% from 3.0% in both November and December, despite the impact of November’s cyclone and subsequent floods, which caused significant damage to crops and infrastructure. Higher prices for sea fish, milk powder, chicken, and dried fish were partially offset by a decline in rice. Non-food inflation remained at 1.8% for the second consecutive month, driven by increases in housing and utilities, restaurants and hotels, education, health, and clothing and footwear, while transport prices fell. On a monthly basis, inflation slowed to 0.6% from 1.2% in December.