January national prices soften to 2.4% on lower food prices

• Prices measured on monthly basis too fell sharply to just 0.4%, from 1.6% in December 2025
• Food inflation rose by 3.4% YoY
• Non-food inflation stayed at 1.6% in January from a year ago 

The national consumer prices softened in January from December 2025, as both the food prices and non-food prices eased after rising at the final month of last year. This was due to the flood-related crop losses and the festive season demand.

The prices measured nationally rose by 2.4 percent in the 12 months through January 2026, softening from 2.9 percent in December 2025.

The prices measured on a monthly basis too fell sharply to just 0.4 percent, from 1.6 percent in December 2025.

The prices measured barring the often-volatile food, energy and transport fell to 2.2 percent in January 2026, from 2.6 percent through December 2025.

The Central Bank said inflation would reach its medium-term target of 5 percent by the second half of this year, while core inflation would also converge at these levels.

There were unconfirmed reports that the Central Bank would revisit its medium-term inflation target as part of its agreement with the government, as inflation has continued to undershot its target in the last three years, after a relatively long spell of deflation too.

While the Central Bank has its medium-term target set at 5 percent, it has space to end up with up to 2 percent up or down from the target level, according to an agreement that has been entered into with the government, as necessitated by the new Central Bank Act of 2023.

Meanwhile, according to the January 2026 national inflation print, the food inflation has risen by 3.4 percent year-on-year (YoY), down from 4.4 percent in December. The monthly prices however didn’t budge after rising 3.5 percent in December.

The prices of fruits, fish, rice, green chilies, vegetables and the likes rose in January from the December levels while the prices of limes, milk powder, eggs, chicken, coconuts and big onions declined.

The non-food inflation stayed at 1.6 percent in January from a year ago, while the monthly prices slightly increased to 0.7 percent, from 0.1 percent in December 2025.

The prices paid to private medical services rose while the cost of transport rose, due to the cost of servicing vehicles increasing. 

Housing rent and tuition fees rose the most in January, causing the non-food prices to move up quite substantially.