Sri Lanka Central Bank Expects Inflation to Decelerate to 5% by Q2 2027 📈

• Inflation Trajectory: Central Bank expects headline inflation to remain in high single digits through Q1 2027 before easing to the 5% target level from Q2 2027 onwards, assisted by favorable base effects. • Current Figures: September inflation reached a 37-month high of 8.0%, staying above the Central Bank's upper target limit of 7% for 3 consecutive months. Medium-term inflation expectations remain broadly anchored around 5%. • Global Oil Factor: Projections assume a eventual easing of the Middle East conflict. Baseline models rely on third-party institutional forecasts (e.g., IMF WEO, JP Morgan). While domestic models previously budgeted for oil near $80/barrel, Brent crude has currently passed US$100/barrel, which may prompt dynamic baseline adjustments.