COLOMBO: Sri Lanka’s inflation could rise to over 7 percent in January, the country’s central bank governor Nandalal Weerasinghe sai on Tuesday.
Addressing a press conference on the first monetary policy review of 2024, he said the increase in the value added tax (VAT) and the increased price of vegetables due to supply-side issues are the main reasons for this prediction.
The increase in VAT alone could drive inflation up to about 7 percent, he said.
The VAT was increased by 3 percent, from 15 percent to 18 percent, with effect from January 2024, after the VAT (Amendment) Bill was passed in Sri Lanka’s parliament in December 2023.
Sri Lanka’s inflation, measured by the Colombo Consumer Price Index (CCPI), increased to 4 percent in December 2023 from 3.4 percent in November, the Department of Census and Statistics said recently.
