The country experienced positive developments during December when inflation in Sri Lanka reached a minus 2% level in its recovery from the 2022 financial crisis. The situation is showing gradual improvement because price levels decreased again from November’s minus 1.7% to minus 2% in December. This price reduction provides some relief to society.
A negative inflation rate indicates decreasing prices that create beneficial conditions for people seeking to cover their basic needs. Food price reduction reached 1.0% while non-food consumer products demonstrated an even greater decrease of 2.9% during December. Daily necessities have become more budget-friendly since the price reduction events across the market. The Sri Lankan government provided additional financial assistance through lower electricity rates with 20% reductions for domestic households and as much as 31% cuts for businesses mainly operating in tourism. The savings achieved by families and businesses because of this initiative increase budgetary efficiency throughout the system.
Economic experts forecast that our inflation levels will decrease to between 2% and 3% during the second part of this year. The central bank plans to achieve 5% inflation stability as its target for mid-2025 because it represents a favorable economic rate. The recovery of Sri Lanka has received significant support from the $2.9 billion loan provided by the IMF that served to establish financial stability across the nation. Data projects Sri Lanka will experience a 5% economic growth in 2024 as it recovers from its recent challenging years.
Source: The Business Standard
