The Colombo Consumer Price Index (CCPI, 2021=100) based headline inflation (year-on-year, Y-o-Y) increased to 7.3% in July 2026 from 6.8% in June 2026, primarily reflecting the adjustment in housing rent in the non-food category and the base effect in food inflation. Meanwhile, food inflation (Y-o-Y) accelerated to 6.3% in July 2026 from 3.6% in June 2026, contributing mainly to the increase in headline inflation, while non-food inflation (Y-o-Y) decelerated to 7.8% in July 2026 from 8.4% in June 2026.
On a month-on-month basis, the CCPI increased by 0.24% in July 2026. This increase was mainly driven by the non-food category, which contributed 0.23 percentage points, largely owing to the increase in housing rent, while the food category contributed a marginal 0.01 percentage points.
Meanwhile, core inflation (Y-o-Y) accelerated to 4.4% in July 2026 from 4.0% in June 2026.
Inflation projections made at the monetary policy round in July 2026, based on available information and assumptions, indicate that headline inflation is expected to remain above the target of 5% in the near term, before easing and stabilising around the target over the medium term, supported by appropriate policy measures. However, amid the fluid nature of the prevailing tensions in the Middle East and its wide-ranging spillovers across both global and domestic economic activity, the present inflation outlook remains subject to elevated uncertainty.
