Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka (CBSL), has projected that inflation in Sri Lanka will remain below 5% until early 2025. This forecast aligns with the CBSL's accommodative monetary policy, aimed at stabilizing the economy following a period of severe inflation.

Dr. Weerasinghe acknowledged that while inflation has not met the lower bound target of 3%, the extended period of low inflation has been advantageous for economic recovery. The favorable inflationary environment has supported both livelihoods and business activities, contributing to a rebound in domestic economic performance.

The stabilization has mitigated previous economic bottlenecks and enhanced business operations. Notable improvements in fiscal performance and the financial turnaround of key state-owned enterprises have allowed the banking sector to focus more on lending to the private sector, particularly to export-oriented and small and medium enterprises (SMEs).

Dr. Weerasinghe also highlighted the Central Bank of Sri Lanka Act enacted in September 2023, which formalizes flexible inflation targeting and a flexible exchange rate policy, reinforcing the foundation for ongoing economic stability and growth.