Sri Lanka flaunts inflation success story to the world

Central Bank Governor Dr. Nandalal Weerasinghe recently showcased Sri Lanka’s inflation success story at an event organised by the Federal Ministry of Germany, the Central Bank said in a brief press release.
Governor Weerasinghe attended, by invitation, the Economic Dialogue Series held in Berlin under the theme ‘Inflation kills democracy: Fiscal rationality as the basis of functioning communities’ on November 21.

“Governor Weerasinghe presented Sri Lanka’s success story in reining in inflation following the record high acceleration in 2022. In his speech, he discussed the measures taken by the Central Bank and the government in curtailing inflation and shared experience on the disinflation strategy and the process,” the press release said.
“The Federal Minister of Finance of Germany, Christian Lindner; the President of the European Central Bank (ECB), Christine Lagarde; and Prof. Albrecht Ritschl, London School of Economics, also spoke at the event, among other speakers,” it added.
Sri Lanka was able to tackle galloping inflation, which almost hit 70 percent in September, by bringing it down to single-digit levels within just 12 months.  To achieve this, the Central Bank primarily opted for a steep increase in interest rates to kill the aggregate demand in the economy.