Pragnaa by JB

CCPI inflation expected to hover around target in May.

Read more at -https://www.linkedin.com/feed/update/urn:li:activity:7465501774553133056 
Key Takeaways:

⚪ Headline CCPI inflation accelerated to 5.4% YoY in April 2026, supported by an increase in both food inflation (2.8% YoY) and primarily non-food inflation (6.8% YoY).

⚪ Within non-food categories, Transport remained the key driver of inflation, increasing by 11.6% YoY, followed by Restaurants & Hotels at 10.5% YoY, while Housing & Utilities inflation remained elevated at 5.4% YoY.

⚪ On a MoM basis, overall inflation increased by 3.0% in April, mainly driven by a 3.6% MoM increase in non-food prices, alongside a 1.7% increase in food prices.

⚪ Looking ahead, CCPI inflation is projected to average 5.0% YoY (±1.5%) in May 2026, remaining around the CBSL’s target level, supported by food inflation of 0.4% YoY (±1.5%) and relatively elevated non-food inflation of 7.2% YoY (±1.5%).

Monthly Primary Surplus - February 2026

Cumulative Performance

* Revenue increased by 35.6% YoY, supported by strong tax collections.
* The overall surplus reached LKR 169.7 Bn, reflecting improved fiscal performance through February 2026.
* The primary surplus strengthened further to LKR 545.4 Bn.

Monthly Performance

* Revenue expanded by 35.8% YoY, driven by growth in both tax and non-tax inflows.
* Expenditure growth continued to accelerate, reflecting a moderate increase in capital spending alongside elevated recurrent expenditure.
* The month recorded a fiscal surplus of LKR 173.5 Bn, reversing the deficit reported in January.

The fiscal balance shifted to a surplus position in February 2026

https://www.linkedin.com/feed/update/urn:li:activity:7461274527415566336

Key Takeaways

⚪ In February , the fiscal position recorded a surplus of LKR 173.5 billion, representing a significant reversal from the deficit of LKR 3.8 billion observed in January.

⚪Government revenue expanded by 35.8% YoY to LKR 562.4 billion, underpinned predominantly by robust tax inflows amounting to LKR 525.7 billion.

⚪ Total expenditure edged up by 1.9% YoY to LKR 388.9 billion, with interest payments of LKR 149.1 billion registering a decline over the period.
⚪The primary balance posted a surplus of LKR 322.6 billion, reflecting a 54.3% YoY expansion in February.

Sri Lanka's External Sector – March 2026
Sri Lanka's current account surplus narrowed sharply in March 2026, contracting 90.7% YoY to just USD 44.6 Mn, as import pressures weighed heavily on the trade balance.

Merchandise trade deficit widened 122.4% YoY as imports surged 30.3% while exports grew a modest 1.0% YoY, driven by industrial exports.

Vehicle imports appear to be stabilizing at corrected levels, well below the late-2025 peak.

Trade balance hit -USD 653.1 Mn, as the services surplus of USD 226.6 Mn only partially offset the merchandise deficit.

Secondary income at USD 802.3 Mn remained the key buffer, keeping the current account in positive territory.

The monthly current account trend shows the surplus has compressed significantly from early-2025 highs.

Want to know what the numbers say about Sri Lanka's external sector? Dive into our latest analysis by JB Securities and find out.

https://www.linkedin.com/posts/external-report-march-2026-ugcPost-7459693412426997760-Brd4?utm_source=social_share_send&utm_medium=android_app&rcm=ACoAABMYENEBIDllkh0jPveNRqiN1AvRFaK9Jt8&utm_campaign=copy_link

Key Takeaways -

⚪ In March 2026, the current account recorded a surplus of USD 44.6 million, reflecting a 90.7% YoY decline.

⚪ The merchandise trade deficit widened by 122.4% YoY, as import growth remained elevated at 30.3%, while export growth was marginal at 1.0% YoY.

⚪ The net services account declined by 42.4% YoY in March, mainly due to contractions in manufacturing and construction services.

⚪ The terms of trade deteriorated by 2.2% YoY in March 2026, reflecting weaker export price dynamics relative to imports.

⚪ Gross official reserves declined to USD 6.8 billion by end-April. Meanwhile, the CBSL’s foreign exchange operations in the domestic market shifted from net purchases to net sales, ending a 22-month streak of reserve accumulation.

⚪ The financial account recorded net lending of USD 349.1 Mn in Q4 2025, with total net incurrence of liabilities of USD 1,065.0 Mn against net acquisition of financial assets of USD 715.9 Mn, compared with net lending of USD 28.1 Mn in Q3 2025.

Monthly Primary Surplus - January 2026

Monthly Performance
⚪ Revenue expanded by 35.3% YoY, supported by both tax and non-tax inflows.
⚪ Expenditure accelerated marginally, reflecting a slight increase in capital spending and recurrent outlays.
⚪ The month recorded a fiscal deficit of LKR 3.81 Bn, narrowing the deficit seen in December.

The fiscal balance deficit narrowed in January 2026. Click the link below to check out the full Fiscal update as of January 2026 by JB Securities.

https://www.linkedin.com/feed/update/urn:li:activity:7454809146383826945

Key Takeaways -
⚪ In January, the budget deficit narrowed, recording a shortfall of LKR 3.8 billion, following a deficit of LKR 419.3 billion in December.

⚪ Government revenue rose by 35.3% YoY to LKR 468.8 billion, driven largely by robust tax collections totaling LKR 434.2 billion.

⚪ Total expenditure rose modestly by 1.4% YoY to LKR 472.6 billion, including interest payments of LKR 226.6 billion.

⚪ The primary balance recorded a surplus of LKR 222.8 billion, marking a turnaround from the first primary shortfall observed in 2025.

Fiscal January Update - 2026 | Pragnaa By JB The fiscal balance deficit narrowed in January 2026 Key Takeaways - ⚪ In January, the budget deficit narrowed, recording a shortfall of LKR 3.8 billion, following a deficit of LKR 419.3 billion in December. ⚪ Government revenue rose by 35.3% YoY to LKR 468.8 billion, driven largely by robust tax...

CCPI inflation is expected to accelerate in April. Click the link below to check out the full Inflation Outlook report by JB Securities.

https://www.linkedin.com/feed/update/urn:li:activity:7454771611188060160

Key Takeaways -

⚪ Headline CCPI inflation increased to 2.2% YoY in March 2026, supported by a rise in both food inflation (0.7% YoY) and non-food inflation (2.9% YoY).

⚪ Within non-food categories, Housing & Utilities inflation remained elevated at 3.3% YoY, while Transport inflation reverted to positive territory at 0.8% YoY, marking the end of the recent deflationary trend.

⚪ On a MoM basis, overall inflation rose by 0.3% in March, primarily driven by an increase in non-food prices (0.8% MoM), despite a contraction in food prices (-0.8% MoM).

⚪ Looking ahead, CCPI inflation is projected to average 3.6% YoY (±1.5%) in April, remaining below the 5.0% target, supported by food inflation of 1.9% YoY (±1.5%) and relatively elevated non-food inflation of 4.4% YoY (±1.5%).

Inflation Outlook - April 2026 | Pragnaa By JB CCPI inflation is expected to accelerate in April. Key Takeaways - ⚪ Headline CCPI inflation increased to 2.2% YoY in March 2026, supported by a rise in both food inflation (0.7% YoY) and non-food inflation (2.9% YoY). ⚪ Within non-food categories, Housing & Utilities inflation remained elevated...

Sri Lanka Inflation – March 2026
Inflationary pressures increased.

Headline Inflation: +2.2% YoY
Non-Food Inflation: +2.9% YoY
▫ Housing & Utilities: +3.3%
▫ Transport: 0.8%
Food Inflation: +0.7% YoY

Sector Highlights
YoY: Transport sector moved back into positive territory, while housing & utilities continued to show steady upward momentum.

MoM: Non-food inflation increased compared to the previous month, while food inflation continued its declining trend.

Core Inflation (excl. Housing & Transport): +3.6% YoY, indicating persistent underlying demand pressures.

Sri Lanka’s economy grew by 5.0% in 2025, signaling a steady recovery path.

Growth was largely driven by net taxes, construction, and manufacturing, highlighting the strong contribution from industrial activity and taxes to overall economic expansion.

The economy is now almost back to its pre-crisis peak of 2018, remaining only 0.8% below the previous high.

Meanwhile, per capita GDP increased to USD 5,000 in 2025 from USD 4,516 in 2024, reflecting a gradual improvement in economic output per person.

#2025