Govt Sees Inflation Within 3.5 to 4.5% Range in July

Inflation is expected to remain within the range of 3.5-4.5 percent for July 2025, the Finance Division said in its Monthly Economic Update & Outlook for July 2025. However, it said that risks from recent heavy rains may affect agricultural yields and supply chains. The report notes that CPI averaged 4.5 percent for FY25, a substantial drop from 23.4 percent during the same period last year. CPI inflation was recorded at 3.2 percent year-on-year (YoY) in June 2025, compared to 12.6 percent in June 2024. Month-on-month (MoM), it increased by 0.2 percent, following a 0.2 percent decrease in May 2025. A key factor behind this moderation is the significant decline in perishable food prices, which fell by 10.6 percent YoY, easing pressure on the overall food basket. Additionally, the Housing, Water, Electricity, Gas & Fuels group also recorded a decline of 3.3 percent. On the other hand, upward contributions came from Health (12.2 percent), Education (10.1 percent), Clothing and Footwear (8.9 percent), Restaurants & Hotels (8.4 percent), Alcoholic Beverages & Tobacco (5.1 percent), Non-perishable Food Items (4.8 percent), Furnishing & Household Equipment Maintenance (3.7 percent), Transport (0.6 percent), and Communication (0.5 percent). The SPI for the week ending July 17, 2025, increased by 0.38 percent. Of the 51 essential items, prices of 22 items increased, 9 items decreased, and 20 items remained stable.