According to data from Sri Lanka’s state statistics office, the country’s inflation rate stood at 2.1 percent for the 12 months leading up to December 2025, with prices increasing by 1.2 percent within the month. The Colombo Consumer Price Index, a key measure of inflation, rose to 195.8 points in December from 193.4 points in November.

Since September 2022, consumer prices in Sri Lanka have increased by 3.4 percent over a period of 39 months, a trend that began as the central bank’s deflationary policy started to affect the balance of payments. In 2025, the price index showed an absolute decline from 192.6 points in January to 191.2 points in April, after which it began to rise slightly as the Sri Lankan rupee depreciated.

By the end of the year, the Sri Lankan rupee had depreciated to 309.50/60 against the US dollar. This occurred amid selective convertibility and significant dollar purchases by the central bank, which went beyond its deflationary policy measures. Globally, prices have remained relatively stable, with the Federal Reserve implementing a broadly deflationary policy, although this was paused with the last interest rate cut.

(Colombo/Dec31/2025)