Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) decelerated sharply to 0.9% in March 2024 from 5.9% in February 2024. This deceleration in the headline inflation is broadly in line with the projections of the Central Bank of Sri Lanka (CBSL).

Non-Food Category recorded a deflation (Y-o-Y) of 0.5% in March 2024 compared to the inflation of 7.0% observed in February 2024. Nevertheless, food inflation (Y-o-Y) accelerated to 3.8% in March 2024 from 3.5% in February 2024. Monthly change of CCPI recorded -1.94% in March 2024 due to the price decreases of 0.66% observed in the items of Food category and decreases of 1.28% observed in Non-Food category items. Meanwhile, core inflation (Y-o-Y), which reflects the underlying inflation trends in the economy, accelerated to 3.1% in March 2024 from 2.8% in February 2024.

Both import expenditure and export earnings increased in February 2024, compared to a year ago. However, as the increase in imports surpassed that of exports, the trade deficit widened. Also, import expenditure in February declined notably compared to previous month, led by lower fuel imports. 

Services sector recorded notable net inflows in terms of earnings from tourism, sea transport, air transport, and computer and IT/BPO related services. 

Workers’ remittances continued to record improvements on year-on-year basis in February 2024 as well.

In February 2024, foreign investment to the Colombo Stock Exchange (CSE) recorded the highest monthly net inflow since February 2022, while there was a net outflow from the government securities market.

Gross Official Reserves stood at US dollars 4.5 billion by end February 2024 and the Sri Lanka rupee appreciated by 7.6 per cent against the US dollar during the year up to 28 March 2024.