Sri Lanka’s Colombo Consumer Price Index (CCPI) indicated a slowdown in headline inflation on a year-on-year basis in February 2026, primarily due to a reduction in certain food prices, despite an increase in non-food prices, according to the central bank.

The Central Bank of Sri Lanka (CBSL) reported that headline inflation, year-on-year, was recorded at 2.3% in January 2026, up from 2.1% in December 2025, aligning with the bank’s near-term projections. In February 2026, headline inflation further decreased to 1.6%, down from 2.3% in January 2026.

Food inflation year-on-year experienced a significant decline, dropping to 0.2% in February 2026 from 3.3% in January 2026. In contrast, non-food inflation accelerated, rising to 2.3% in February 2026 from 1.8% in the previous month.

The central bank emphasized that its inflation projections from the monetary policy round in January 2026 suggest a gradual movement towards the target inflation rate of 5% by the second half of 2026, supported by appropriate policy measures.

The Colombo Consumer Price Index, a key economic indicator, decreased by 0.9% in February, falling to 195.3 points from 197.0 points in January. On a month-on-month basis, the CCPI recorded a decrease of 0.85% in February 2026. This decline was predominantly driven by the food category, which contributed -0.86 percentage points, primarily due to lower prices of vegetables and green chilies. Meanwhile, the non-food category contributed a marginal increase of 0.01 percentage points.

Core inflation, which reflects the underlying inflation trends in the economy, also showed a deceleration, reaching 2.1% in February 2026 from 2.3% in January 2026.