Are Your Groceries Getting Cheaper, or Will Prices Start Climbing Soon? What the Central Bank's Latest Price Check Says!
Machang, remember how we used to talk about how expensive everything was? The price of kottu, bus fares, even your morning 'kopi' – they all seemed to climb like a monkey up a coconut tree! Well, the Central Bank keeps a close eye on all these prices with something called the Colombo Consumer Price Index, or CCPI. It's like their monthly bill for everything we buy.
This new report, just out from the Central Bank, gives us the latest update on these prices for June 2025. And it tells us that things are changing, like the weather from monsoon to sunny!
What’s This Report About, Really? This is the Central Bank's latest report on the Colombo Consumer Price Index (CCPI) for June 2025. It’s like a report card on how much the prices of everyday goods and services are changing for an average household in Colombo.
Five Take-Home Points (Plain-Talk Bullets)
1. Prices Are Still Falling Compared to Last Year, But Not As Much!
The big headline is that overall prices were still a bit lower in June 2025 compared to June 2024. This is called "deflation." But here’s the key: this fall is now much smaller (-0.6%) than it was in May (-0.7%). It’s like your tyre was losing air, but now the leak is much slower, almost stopped.
2. Month-to-Month, Prices Actually Went Up!
Even though prices are lower than last year, if you compare June 2025 to May 2025, prices actually climbed up by 0.9%! This is the first clear sign that things are slowly starting to get more expensive again. Think of it like your rice bill for this month being slightly higher than last month.
3. Food Prices Still Rising, But Not As Fast
Good news for your kitchen budget: food prices are still going up year-on-year (+4.3%), but the speed of that increase has slowed down from last month (it was +5.2%). So your weekly 'pola' trip might still feel a bit heavy on the wallet, but at least it's not getting crazy heavier.
4. Other Prices (Non-Food) Are Falling Slower
Things like clothing, health, communication, and transport (non-food items) were also cheaper than last year, but the drop is getting smaller (-2.8% in June vs. -3.3% in May). This means they will likely start climbing soon too.
5. The "Underlying" Price Trend is Up!
This is important, machang. The report talks about "core inflation" (prices without the super-bouncy items like fresh food or fuel). This core inflation actually picked up speed, going from 1.2% to 1.5%. This tells us that, underneath everything, the general trend of prices across the economy is starting to rise.
How Could It Touch Your Wallet?
- Your Daily Bills: Get ready, machang. The month-on-month increase and the rise in "core" prices mean that the cost of your daily essentials is likely to start creeping up again. Budget wisely!
- Borrowing Money: If prices are expected to climb, the Central Bank might not rush to cut interest rates too much. This means loan rates might stay where they are for a while.
- Your Savings: If prices start rising again, your hard-earned savings need to earn good interest to keep up. Otherwise, your money loses its buying power.
Simple Portfolio Tweaks for Small Investors
Okay, machang, remember, I’m just a friendly neighbour who loves numbers, not a licensed professional giving financial advice. Always double-check with your own banker or a real expert before making any big money decisions.
| Goal | Possible Move | Why It Helps Now |
|---|---|---|
| Keep savings safe | Keep a good portion in fixed deposits or government Treasury bills/bonds. | You want your interest earnings to ideally beat the rate at which prices are climbing, so your money doesn't lose value over time. |
| Try to grow a bit | Look at blue-chip shares in essential sectors (like food manufacturers or certain service providers). | As prices climb, companies producing essentials can often increase their prices, which helps their profits and could mean better returns. |
| Protect from price rises | Consider putting a small part of your savings into gold jewellery or a gold savings scheme. | If inflation picks up more than expected, gold has traditionally been a good "safety net" to protect your money’s value. |
| Support local production | Explore small agriculture-linked ventures or local businesses focused on essential goods. | People always need food and basic items. Investing in ventures that meet these consistent local demands can be a resilient way to diversify. |
Quick Q&A Corner
"So, are prices definitely going to keep climbing now?"
The Central Bank's forecast says they expect inflation to pick up gradually and aim for around 5% yearly. So, yes, the expectation is for prices to start rising again, but hopefully at a controlled pace.
"What should I do with my current savings?"
The most important thing is to make sure your savings are working for you. If they're just sitting under the mattress, they’re losing value as prices climb. Talk to your bank about options like fixed deposits or Treasury bills that give you a decent return.
The Bottom Line
Machang, this report tells us that the period of falling prices (deflation) is slowly ending, and we should expect prices to start climbing again. This is a sign that our economy is trying to get back to a more "normal" state. It means you need to be smart about your spending and even smarter about your savings!