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Sri Lanka inflation accelerates to 1.7-pct in October

ECONOMYNEXT – Sri Lanka’s consumer prices rose 1.7 percent in the 12-months to October 2015, up from a negative 0.3 percent last month, ending two months of falling prices.

The widely watched Colombo Consumer Price Index gained 0.7 points to 182.1 points.

The price index which was at 183.2 points in January fell sharply by 2.3 percent in February after the government cut prices of several traded goods including fuel.

Though the index gained steadily since then, except for the last two months, but 12-month inflation was low or negative due to one off effect.

In October food prices rose 0.8 percent but non-foods index was flat.

Sri Lanka rupee also fell sharply over September, but global commodity prices were flat and falling with a strong US dollar. Sri Lanka is facing balance of payments pressure with a recovery in domestic credit, and monetization of debt.

Concerns have been raised over core-inflation, which is made up mostly of non-traded items. Core inflation rose to 4.4 percent from 4.2 percent a month earlier. (Colombo/Oct30/2015)

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