Sri Lanka’s inflation cooled for a fifth month in June as elevated rates and taxes reduced demand, while increased inflows helped boost supplies of essential goods.
(Bloomberg) — Sri Lanka’s inflation cooled for a fifth month in June as elevated rates and taxes reduced demand, while increased inflows helped boost supplies of essential goods.
The consumer price index in Colombo rose 12% from a year ago, the Statistics Department said Friday,.
That’s faster than a Bloomberg survey estimate of a 13.4% gain and compares with a 25.2% rise in May based on a revised index.
The latest reading comes ahead of monetary policy review set for July 6.
The Central Bank of Sri Lanka earlier this month cut the standing lending facility rate for the first time in nearly three years amid faster disinflation.
The central bank expects price gains to reach single digits in the early third quarter, compared to the IMF’s expectation for the inflation target band of 4%-6% to be reached by early 2025.
The island nation is making progress on debt restructuring efforts.
Sri Lanka this week announced plans to restructure about $19.8 billion of bills and bonds, equivalent to half its local debt load, to meet bailout terms. Authorities are also negotiating terms with the nation’s international bond holders and bilateral creditors to reduce the external financing gap by $17 billion.
–With assistance from Tomoko Sato.
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