However, the annual average inflation, increased marginally to 3.6 percent in May from 3.4 percent in April. Consumer's Price Index rose by 1.6 percent over previous month's, with the Index moving upward to 215.9 from 212.6 in April.

Central Bank has maintained low interest rates with the reverse repurchase rate currently at 9.75 percent and the repurchase rate at 7.5 percent to sustain the economic recovery, the government so desires.

The Central Bank expects to continue its tight monetary policies to keep inflation below 10 percent while sustaining an economic recovery.

An International Monetary Fund mission that visited Colombo May 12-21 to hold discussions on performance and policies under the $2.6 billion Stand-By Arrangement, said they see little sign of emerging demand-driven inflationary pressures, and average inflation for the year as a whole is expected to remain in the single digits.