Sri Lanka Inflation Dips Marginally To 61 Per Cent In November

Sri Lanka’s key inflation rate dipped marginally to 61 per cent in November, down from 66 per cent in October, the country’s statistics office said on Wednesday, as the crisis-hit economy showed signs of recovery.

The 12-month inflation by the Colombo Consumer Price Index peaked at 69.8 per cent in September and the National Consumer Price Index peaked at 73.8 per cent.  

The consumer price index in Colombo eased to 61 per cent in November, marginally down from 66 per cent reported in October, the Census and Statistics Department said.

This is the second straight month that the key inflation rate has eased this year.

Central Bank Governor Nandalal Weerasinghe on Wednesday said the dipping inflation rate after peaking at 70 per cent was a good indicator that the economy was trudging along the path of recovery.

The Central Bank of Sri Lanka has raised borrowing costs by 950 basis points this year, taking the key rate to 15.5 per cent to tame rising prices.

Colombo seeks to secure the release of a USD 2.9 billion rescue package from the IMF, which was announced in September.  

For this to happen, its creditors, including China and India must restructure the debt.

The Sri Lankan government in May appointed international legal and debt advisors for debt restructuring after the country declared its international debt default for the first time in history.  

Sri Lanka is nearly bankrupt and has suspended repaying its USD 51 billion foreign debt, of which it must repay USD 28 billion by 2027.

Sri Lanka, a country of 22 million people, plunged into financial and political turmoil earlier this year as it faced a shortage of foreign currencies.

Due to this, the country has been unable to afford key imports, including fuel, fertilisers, and medicines, leading to serpentine queues.