FINANCIAL CHRONICLE – In May 2026, Sri Lanka’s inflation rate, as indicated by the Colombo Consumer Price Index (CCPI), surged to its highest level in 27 months, reaching 5.5 percent, nearing the upper limit of the Central Bank’s inflation target. This information was released by the state statistics office.
The Central Bank had anticipated achieving its mid-term inflation goal of 5 percent later than May, but analysts attribute the recent increase in prices to the ripple effects of fuel price hikes over the previous two months.
Inflation rose from 5.4 percent in April, marking the highest level since February 2024, according to the data. The country’s economy has seen upward price adjustments following a significant fuel price increase of approximately 40 percent, driven by supply shortages linked to tensions in the Middle East and consequent rises in global oil prices.
The closely monitored CCPI increased by 1.8 points in May, moving from 201.6 points in April to 203.4 points. Both food and non-food sectors contributed to this inflation spike, with the index showing a 0.9 percent rise in May compared to the previous month.
The state-run Statistics office reported that this increase translates to an added expenditure of Rs. 1,625.48 for the typical market basket. “The month-on-month variation was chiefly influenced by a 0.26% rise in food items and a 0.62% increase in non-food items,” they noted.
Within the food category, the most significant contributor to the price rise was vegetables, followed by sea fish. In the non-food category, transportation was the leading factor, followed by housing, water, electricity, gas, and other fuels.
This week, the Central Bank raised its Overnight Policy Rate by 100 basis points to address demand-driven inflation concerns. (Colombo/May 29/2026)
