CCPI-based headline inflation in Sri Lanka sees sharp decline in May

03 Jun '23

1 min read

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Insights

Sri Lanka's headline inflation, as measured by the year-on-year (YoY) change in the Colombo consumer price index, decreased to 25.2 per cent in May this year from 35.3 per cent in April.
Non-food inflation decreased YoY to 27 per cent in May from 37.6 per cent in April.
Core inflation (YoY) decreased to 20.3 per cent in May from 27.8 per cent in April.

Headline inflation in Sri Lanka, as measured by the year-on-year (YoY) change in the Colombo consumer price index (CCPI, 2021=100), decreased to 25.2 per cent in May this year from 35.3 per cent in April.

The decline is broadly in line with the disinflation path envisaged by the Central Bank of Sri Lanka (CBSL) in April, the bank said.

Non-food inflation decreased YoY to 27 per cent in May from 37.6 per cent in April.

The monthly change of CCPI was recorded at minus 0.02 per cent in May. This small monthly change was due to the netting off of price decreases observed in the items of non-food category.

The core inflation (YoY), which reflects the underlying inflation in the economy, decreased to 20.3 per cent in May from 27.8 per cent in April this year.

Looking ahead, the declining trend of inflation is expected to continue, bringing down inflation towards single digit levels in Q3 2023, faster-than-projected earlier.

This disinflation process is supported by the lagged impact of tight monetary and fiscal policies, strengthening of the Sri Lanka rupee, reduction in fuel and gas prices, normalisation of food prices and the favourable impact of statistical base effect, the central bank added.

Fibre2Fashion News Desk (DS)