In January 2026, Colombo, the capital of Sri Lanka, experienced an annual inflation rise to 2.3%, marking the highest level since July 2024 and an increase from 2.1% in December. Food inflation saw a slight uptick to 3.3%, compared to 3.0% in November and December, despite facing the aftermath of November's cyclone and subsequent floods that heavily impacted crops and infrastructure. Price hikes in sea fish, milk powder, chicken, and dried fish contributed to this rise, though a decrease in rice prices somewhat counterbalanced these effects. Non-food inflation held steady at 1.8% for the second month in a row, driven by increased costs across housing and utilities, dining and lodging, education, health, and clothing and footwear, whereas transport costs dropped. On a month-to-month basis, inflation decelerated to 0.6%, down from 1.2% in December.