Sri Lanka’s inflation rate dropped to minus 2% in December, marking a positive turn as the country continues to recover from the financial crisis it went through in 2022. This follows a decrease to minus 1.7% in November, showing that the situation is slowly improving, with prices falling and offering some relief to people.
A negative inflation rate means that prices are going down, which is good news for people who are trying to make ends meet. In December, food prices fell by 1.0%, and non-food items saw an even bigger drop of 2.9%. This makes things a bit more affordable for everyone, especially when it comes to everyday essentials. To help further, the government reduced electricity bills—by 20% for households and up to 31% for businesses, especially in the tourism sector. This helps families and companies save money and lowers costs across the board.
Experts predict that inflation will stay low for the next few months, expecting it to reach around 2%-3% by mid-year. The central bank aims to keep inflation stable at 5% by mid-2025, which would be a more balanced rate for the economy. Sri Lanka’s recovery has also been helped by a $2.9 billion loan from the IMF, which has played a major role in stabilizing the country’s finances. With this support, Sri Lanka is expected to grow by about 5% in 2024, showing real signs of bouncing back after a tough few years.
Source: The Business Standard
