FX.co ★ Sri Lanka Producer Prices Fall for Second Month

Producer prices in Sri Lanka experienced a 0.4% year-on-year decrease in August 2025, following a revised decline of 0.3% in July. This represents the second consecutive month of producer deflation, predominantly influenced by ongoing reductions in agricultural product prices, which fell by 1.6% compared to a 3.4% drop in July. This decrease can be attributed largely to reduced costs associated with non-perennial crops and animal production. The deflationary trend was also evident in the electricity, gas, steam, and air conditioning supply sector, which saw a decline of 7.9%, although this was a significant improvement from the previous month's 25.9% drop. In contrast, manufacturing price growth slowed to 0.7% from 1.1%, mainly due to substantial decreases in prices for coke and refined petroleum products. Additionally, producer inflation in water collection, treatment, and supply reduced to 15.8% from 17%. On a month-to-month basis, producer prices increased by 0.7% in August, marking the first rise in four months after a 0.4% decrease in July.