CBSL Governor says inflation could rise to 7% this month

By Rathindra Kuruwita

Inflation could rise to about 7% in January 2024, Governor of the Central Bank (CBSL), Dr. Nandalal Weerasinghe has said.

Addressing the media on the first monetary policy review of 2024, Dr. Weerasinghe said on Tuesday that the increase in the Value Added Tax (VAT) and the increased prices of vegetables due to supply-side issues were the main reasons for an increase in inflation.

The VAT was increased by 3 percent, from 15% to 18% from 01 January 2024, after the VAT (Amendment) Bill was passed by Parliament on 11 December 2023.

Sri Lanka’s inflation measured by the Colombo Consumer Price Index (CCPI) increased to 4% in December from 3.4 percent in November, according to the Department of Census and Statistics (DCS).