Sri Lanka’s deflationary phase has ended as Colombo’s inflation rate climbed to 1.2% in August 2025, reversing the negative figure recorded in July and signaling renewed price pressures in both food and non-food categories.
The Department of Population and Statistics has announced the Colombo Consumer Price Index (CPI) and the Colombo Urban Community Consumer Inflation Rate for August 2025, confirming that inflation has returned after a brief period of deflation.
According to the data, the Colombo Urban Community Consumer Inflation Rate increased to 1.2% in August, compared to -0.3% in July 2025. This marks the end of the recent deflationary trend and highlights a shift in price dynamics.
In the food category, annual inflation rose to 2.0% in August, up from 1.5% reported in July. Prices of essential goods and food staples contributed to this increase, placing further strain on household budgets.
The non-food category also saw a significant turnaround. Annual inflation in this segment climbed to 0.8% in August, compared to a deflation of -1.2% in July. This increase reflects rising costs in goods and services outside the food sector, underscoring a broader trend of price growth.
The latest figures suggest that while deflationary pressures have eased, the return of inflation could reshape consumer spending patterns in the coming months. Analysts warn that even modest increases in inflation rates can have a lasting impact on urban communities already managing tight household finances.
