Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) decelerated to 0.9% in May 2024 from 1.5% in April 2024. This deceleration in the headline inflation is broadly in line with the projections of the Central Bank of Sri Lanka (CBSL).

Prices of the items in the Food category, on year-onyear basis, remained unchanged in May 2024 (i.e., 0.0% Food inflation (Y-o-Y) in May 2024 compared to 2.9% in April 2024). Nevertheless, Non-Food inflation (Y-o-Y) accelerated to 1.3% in May 2024 from 0.9% in April 2024. On a month-on-month basis, inflation continued to decline. Accordingly, monthly change of CCPI recorded -0.57% in May 2024 due to the price decreases of 0.37% observed in the items of Food category and the price decreases of 0.20% observed in the items of Non-Food category. Meanwhile, core inflation (Y-o-Y), which reflects the underlying inflation trends in the economy, accelerated marginally to 3.5% in May 2024 from 3.4% in April 2024.

Exports increased more than imports (y-o-y), reducing the trade deficit in April 2024. However, cumulative trade deficit for Jan-Apr 2024 widened.

The momentum in tourism continues, though tourist arrivals slowed in April 2024 in line with the seasonal pattern.

Inflows to the other services sectors also remained strong in the first four months of 2024.

Workers’ remittances continued to contribute notably to the external current account and forex market liquidity.

Foreign investment outflows from the government securities (G-Sec) market continued in April 2024.

Gross Official Reserves stood at US$ 5.5 billion at end April 2024, recording over US$ 1 billion increase from end 2023.

The Sri Lanka rupee remained appreciated during the year up to end May 2024.