Abstract:
The success, development, and stability of a country can be determined by how that country
solves its economic problems and through micro and macroeconomic indicators of that country.
Macroeconomics is the branch of economics that studies the behavior and performance of an
economy as a whole. Changes in this indicator will have an impact on the dynamics of economic
growth. From an economic point of view, inflation means that the purchasing power of the currency
of that country decreases in the domestic market due to the general rise in the prices of commodities
in the market. Inflation has occupied most countries today. Inflation has become one of the most
complex problems faced by the communities, not only in developing countries but also in
developed countries. A high inflation rate has adverse effects on the economic performance of a
country. Accordingly, this study aims to identify the causes of inflation in Sri Lanka and the solutions
given by Islam for them. The data for this qualitative study were obtained from secondary sources
such as research articles, books, journals, web articles, publication reports, and records. According to
the study, the main causes of inflation in Sri Lanka are such as internal political conflicts and civil
war, a decrease in the value of the rupee, an increase in government debt, money supply, government
expenditure, increase in public and private investment, natural disasters, changes in import and export
prices, and shifts towards export-oriented industrialization. In addition, the study explains the
following as a solution to them given by the Islam, such as the prohibition of interest and replaced it
with the trade based on profit and loss sharing, the obligation of Zakat tax, the prohibition of hoarding
business, the prohibition of waste, encourages of the hard work, provide excellent guidance in the
matter of credit and the administration of the State. The study also discusses the recent trend of
inflation in Sri Lanka and identifies various indicators used to measure Sri Lankan inflation
