A significant reduction in electricity tariffs in January led to a further decline in consumer prices in Colombo in February. According to Daily Mirror, the Colombo Consumer Price Index (CCPI) dropped by 4.2% year-on-year, accelerating from January’s 4.0% decline. This marks the sixth consecutive month of deflation since September 2024.

Non-food prices saw a sharp 6.1% drop, largely driven by lower electricity costs. Food prices also eased, with staples like rice, fresh fish, and dried fish becoming more affordable. However, coconut, fresh fruit, and vegetable prices rose sharply. On a monthly basis, overall consumer prices fell by 0.2%.

The Central Bank expects inflation to remain negative in the first quarter before turning positive mid-year. By the second half of 2025, inflation is projected to stabilise around 5%, with a brief rise expected in early 2026.