ECONOMYNEXT – The self-congratulatory and almost gloating terms in which the return of monetary depreciation and accompanying rise in the cost of living towards the central bank’s inflation target is welcomed by macro-economist is in bad taste. Inflation is nothing other than an immoral philosophy cooked up by post-1960s macroeconomists who rejected classical economic theory for statistics and visited great privations upon vast populations. The return of depreciation and inflation which will eat into consumption undermine living standards, put capital expenditure projects out kilter and inflate planned costs and sabotage plans by the government to bring down electricity costs is nothing to be so happy about.

Though it may give short term profits to companies and banks and their customers that are closest to the inflationary operations of the central bank, inflation and depreciation will kill growth and costs will ultimately catch up. Gloating over the rising cost of living? “The current low level of inflation, at 1.6 percent (y-o-y) in February 2026, relative to the target of 5 percent, provides sufficient space to accommodate the impact of higher energy prices and their spillovers on inflation,” the central bank claimed in its last monetary policy statement after depreciating the rupee from 300 to 315 after printing money through swaps and denying convertibility for more than a year.

“Given the latest available data and prevailing uncertainties, inflation is now expected to reach the target of 5 percent in Q2-2026, earlier than previously anticipated,” the central bank statement added in self-congratulatory terms. “Inflation is projected to remain around the target thereafter. available data and prevailing uncertainties, inflation is now expected to reach the target of 5 percent in Q2-2026, earlier than previously anticipated. “Inflation is projected to remain around the target thereafter.” Where is the space in the people’s family finances?

How can the central bank claim there is ‘space’ to accommodate higher prices, after destroying people’s wages, pensions and Employees Provident Fund balances by busting the rupee from 184 to 300 from 2022 to 2023 and from 131 to 184 to the US dollar from 2015. What family has ‘space to accommodate’ the rise in cost of living? How can a state agency frame the hardships it inflicts on the poor, with higher food and energy prices, the overall reduction of disposable incomes of the citizenry of a nation, and the losses it inflicts on state enterprises with dollar debt and the expansion of foreign debt, in these almost gloating terms.

Does it not remember that by busting the rupee from 184 to 300 to the dollar, it made the population fall on all fours, destroying wages and pushed a large section of the populace into poverty and marginal income brackets into near starvation and made them skip meals? How can this state agency rejoice as the meagre salary increments the people got over the past year as the economy limped back to a recovery are further destroyed in 2026? The International Monetary Fund was no better, framing the hardships of the poor in positive terms.

“The economy grew by 5 percent year on year in 2025,” the IMF said in a statement. “Inflation has returned to positive territory and rebounded to 2.2 percent year on year in March.” The return of inflation, the destruction of wages of the poor, rising food and energy prices is nothing to celebrate as ‘rebounded’. Sri Lanka’s economic growth ‘rebounded’ to 5 percent, not due to inflation as macro-economists try to make their victims believe, but due to the lack of inflation and lack of monetary depreciation that made prices predictable and real wages to rise, however slowly.

Recovery from Say’s law not inflation and stimulus This is not a recovery from inflation or stimulus as touted by macroeconomists, post-2000 inflationist central bankers, out of the clost Keynesians, and the ‘policy support’ often touted by the some IMF officials also, but the Say’s law in action. The recovery was also helped by the current leadership of the central bank itself appreciating the currency back to 300 to 360 to the US dollar and preventing further inflation of housing, education and health care and transport costs. But the effects of that original destruction of the rupee which radically altered the price structure of traded goods and wages, and also the pre 2022 destruction of the, rupee is still working through services like private education, housing costs and rents, while wages of most people lag.

That is why governments were ousted after the rate cuts to reach the 5-percent inflation target triggered currency depreciation without a war in Sri Lanka. There is no ‘wage spiral inflation’ as macro-economists and post -1960s central bankers so craftily claim. Workers strike because food and energy prices, which respond fastest to money printing and depreciation, have made their life miserable, but are not captured in some indices