Macroeconomic Forecast Sri Lanka

Headline inflation came in lower in August at 7.0% y-o-y (from 7.4% in July), with food inflation ticking down to 8.2% y-o-y (from 9.3%) while non-food inflation held steady at 6.0% y-o-y. The latest headline figure for inflation is the lowest in seven months, reducing further pressure on the Central Bank of Sri Lanka (CBSL) to reverse its stance on interest rates. The CBSL's decision to hike its statutory reserve ratio by 100 basis points in April appears to have taken hold of inflationary pressures. We continue to see headline inflation heading lower in the coming months, with our end-2011 forecast at 6.6%.

To read the full article, please choose one of the following options: