Sri Lanka’s consumer prices, measured by the National Consumer Price Index (NCPI), recorded an increase in September 2025, mirroring the trend seen in the Colombo Consumer Price Index for the same period.
According to official data, inflation rose to 2.1% in the twelve months ending September, up from 1.5% in August, indicating that overall prices are climbing in line with the Central Bank’s projections.
On a monthly basis, national consumer prices increased by 0.1%, reversing the 0.5% decline recorded in August.
The Central Bank has forecast that prices will gradually increase after the country emerged from a year-long deflationary period, aiming to reach the medium-term inflation target of 5% by mid-2026, provided no major supply disruptions occur.
The rise in September prices was largely driven by higher food costs, which jumped 3.8% year-on-year, compared to 2.9% in August. Month-on-month, food prices edged up 0.1%, following a 1.2% decline in August.
Increases were observed in the prices of lime, coconuts, milk powder, chicken, and big onions, while vegetables, rice, green chilies, red onions, and eggs saw price declines.
Meanwhile, core inflation—which excludes volatile items such as food, energy, and transport—rose to 1.9% in September from 1.5% in August, signaling a gradual rise in underlying inflationary pressures within the economy.
Core inflation is closely monitored by policymakers when making monetary policy decisions.
In September, the Central Bank kept its policy interest rate unchanged at 7.75%, stating that the current level was appropriate to guide inflation toward its target range.
Non-food inflation also rose modestly, increasing 0.7% year-on-year in September compared to 0.4% in August. On a monthly basis, non-food prices rose by 0.1%, the same as the previous month.
While fuel price cuts helped to limit non-food inflation, there was a notable rise in spending on education, restaurants, and hotels, reflecting higher disposable incomes and growing consumer confidence in the economy.
