The Finance Division has announced that inflation is expected to remain within the range of 3.5% to 4.5% for July 2025. This projection was shared in the Monthly Economic Update & Outlook for July 2025.
However, recent heavy rains could affect agricultural output and disrupt supply chains. These factors may pose risks to the inflation forecast.
The report highlights that inflation, measured by the Consumer Price Index (CPI), averaged 4.5% during the fiscal year 2025. This is a significant drop compared to 23.4% recorded in the previous fiscal year.
In June 2025, inflation stood at 3.2% year-on-year, down from 12.6% in June 2024. On a month-on-month basis, inflation increased by 0.2% in June after a 0.2% decrease in May.
A major reason for this easing inflation is the 10.6% year-on-year decline in prices of perishable food items. This reduction helped ease pressure on the overall food basket. The Housing, Water, Electricity, Gas, and Fuels sector also saw a 3.3% decrease.
Despite these declines, some categories recorded price increases. Health costs rose by 12.2%, Education by 10.1%, and Clothing and Footwear by 8.9%. Other sectors such as Restaurants and Hotels, Alcoholic Beverages and Tobacco, and Non-perishable Food Items also showed upward price trends.
The Sensitive Price Index (SPI) increased by 0.38% in the week ending July 17, 2025. Among 51 essential items tracked, 22 saw price increases, 9 had price decreases, and 20 remained stable.
Overall, inflation remains moderate but risks from weather conditions could influence future trends.
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