Sri Lanka Seeks to Manage Inflation Amid Global Oil Price Uncertainty

Sri Lanka's Central Bank Governor Dr Nandalal Weerasinghe believes that inflation can be managed if global oil prices remain at around $80 a barrel through the end of this year. He made this statement during an interview in Sydney, Australia.

The country is still recovering from its economic crisis, which included a sovereign default in 2022 and entry into an IMF-supported programme. The Central Bank raised its benchmark rate by one percentage point in May to contain credit demand amid rising global energy prices.

Despite continued global uncertainty, Governor Weerasinghe expects Sri Lanka's inflation to slow towards the Central Bank's 5% target during the second half of this year and into next year. He also predicts that economic growth will moderate to around 4-5% in the second half of this year.

The country is expected to fully complete its four-year IMF programme in the second half of 2027, with the next review expected around November or December this year.