Colombo Inflation Hits 8%, Food Prices Drive Surge

Sri Lanka's inflation woes continue as the country's capital city, Colombo, saw its Consumer Price Index (CPI) rise to 8% in August, up from 7.3% in July.

This marks a second consecutive month of increased inflation, putting pressure on the Central Bank of Sri Lanka, which aims for a 5% inflation target.

The increase was largely driven by food prices, which accelerated to 8.5% in August from 6.3% in July due to an El Niño-linked drought and higher global wheat prices.

While non-food inflation remained relatively flat at 7.7%, policymakers are cautious about loosening borrowing conditions until price pressures clearly subside.