^{File Photo: Dhammika Heenpelle}

Sri Lanka's inflation rate has hit the highest level in decades, as the island’s devastating economic crisis continues.

According to the Sri Lankan government’s statistics department, the inflation rate has accelerated to 70.2% in August, up from 66.7% in July.

Despite this continued rise, the Central Bank of Sri Lanka said last month it expected inflation to ease after peaking at about 70%.

"Inflation is expected to taper from September," said the head of research for Colombo-based investment firm First Capital, Dimantha Mathew to Reuters. "However, inflation is only likely to moderate and reach single digits in the second half of 2023."

The latest figures come after the World Bank ranked Sri Lanka third worst in the world for rising food prices.

Sri Lanka's inflation had already reached a 13-year high earlier this year.

The BBC’s India business correspondent Arunoday Mukharji said:

"Experts have warned that rising food prices mean that economic woes for Sri Lankans will continue for some time to come.

Food security remains a huge concern for the country, especially because fertiliser shortages - due to a lack of foreign currencies - have significantly affected agricultural production. According to some estimates food production has nearly halved.

The country's shrinking reserves of foreign exchange also means that buying large amounts of food from abroad is also not an option."

Read more from the BBC here and Reuters here.