Global Risk Briefing Inflation Forecast of Srilanka Inflation is an increase in the level of prices of the goods and services that households buy . It is measured as the rate of change in those prices. Typically, prices rise over time, but prices can also fall (a situation called deflation). Causes of inflation generally break down into two categories, demand-pull inflation, and cost-push inflation . In regards to current inflation, the main contributing factors include the increase in the money supply, worker shortages and rising wages, supply chain disruption, as well as fossil fuel policies. The main determinants of inflation in Sri Lanka are economic growth, exchange rate, government expenditure, money supply, oil prices, and interest rates in the long run . The island nation of Sri Lanka is in the midst of one of the worst economic crises it’s ever seen. It has just defaulted on its foreign debts