National consumer prices accelerate to 2.7% in October

Consumer prices, measured by the National Consumer Price Index (NCPI), rose to 2.7 percent in the 12 months ending October 2025, accelerating from 2.1 percent in September, driven by increases in both food and non-food categories.

However, measured on a monthly basis, prices remained unchanged in October compared to the previous month, as a decline in food prices offset a moderate rise in non-food prices.

Sri Lanka’s price indices turned a corner a few months ago, exiting a nearly year-long stretch of deflation as base effects kicked in. The Central Bank cut rates in May to quicken the pace of inflation toward its medium-term target of 5.0 percent, which is expected to be reached by the middle of next year.

Food prices rose by 4.1 percent year-on-year in October, up from 3.8 percent in September. On a monthly basis, food prices fell by 0.1 percent, contrasting with the 0.1 percent increase recorded in September.

Prices of several food items decreased in October compared to the previous month, including vegetables, fresh fish, chicken, fresh fruits, eggs, potatoes, and sugar.

Conversely, price increases were observed in a handful of commodities such as limes, rice, coconuts, milk powder, and big onions.

Meanwhile, non-food prices rose by 1.5 percent in the 12 months to October, picking up from 0.7 percent in September. Monthly non-food prices recorded a 0.2 percent increase, edging up from 0.1 percent the previous month.

Charges for private medical practices, restaurants and hotels, and personal care services—such as hair cutting and shaving—rose in October. This suggests a potential shift in consumer spending patterns toward health, wellness, and leisure as the prices of essentials stabilize.

Core inflation, which excludes often volatile items such as food, energy, and transport, rose to 2.1 percent in October from 1.9 percent in September.