Sri Lanka’s inflation outlook showed a slight shift in early 2026, with the Colombo Consumer Price Index (CCPI) rising to 2.3% in January, up from December 2025 levels. While inflation remains relatively low by historical standards, the increase signals emerging pressures on household expenses, particularly in essential goods.
According to official data, the rise in inflation was mainly driven by food prices, transportation costs, and selected household necessities. Seasonal demand, supply-side adjustments, and global commodity price movements contributed to the upward trend during the month.
Despite the increase, economists emphasise that inflation remains well within manageable levels, especially when compared to the double-digit inflation rates experienced during Sri Lanka’s recent economic crisis. The Central Bank’s cautious monetary policy stance and disciplined fiscal management have played a crucial role in maintaining price stability.
However, the latest data highlights growing concerns among urban households regarding the cost of living, particularly for low- and middle-income earners. Rising food prices and utility costs continue to be closely watched by policymakers, businesses, and consumers alike.
Looking ahead, analysts expect inflation to remain moderate if current monetary and fiscal policies are maintained. Any significant external shocks, fuel price changes, or supply disruptions could, however, influence future inflation trends in Colombo and across the country.
