Sri Lanka Central Bank warns inflation could increase due to higher global fuel prices

By  News On Air   Jun 02, 2026

Sri Lanka’s Central Bank Governor Dr. Nandalal Weerasinghe has warned that inflation in the country could rise to around 7 percent if the ongoing Middle East conflict continues to push up global fuel prices. In an interview to a local news channel, he said higher energy costs are creating fresh inflationary pressures in the island nation, which is still recovering from its worst economic crisis in 2022. Dr. Weerasinghe noted that inflation is currently projected at about 5.4 to 5.5 percent, but could increase further if crude oil prices remain elevated and domestic consumer demand stays strong.

The Governor said prolonged instability in West Asia has disrupted global energy markets, leading to higher fuel prices, which in turn pose risks for import-dependent economies like Sri Lanka. He added that the Central Bank has recently tightened monetary policy as a precautionary step to contain inflation and maintain economic stability. Dr. Weerasinghe also stressed the need to moderate domestic demand in the coming months to prevent a sharper rise in prices.