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Sri Lanka inflation in June 2020 at to 3.9-pct

ECONOMYNEXT – Sri Lanka’s consumer price inflation in the 12-months to June 2020 eased to 3.9 percent from 4.0 percent in May, though food prices picked up sharply, data from the state statistics office showed.

The Colombo Consumer Price Index gained 0.8 percent in June to 135.3 points, slower than the 1.4 percent in 2019, helping moderate the 12-mont rise.

May and June typically shows the steepest rise in the index, during the year after a spike in reserve money in April.

The food index rose by 2.6 percent during the June, after rising 1.3 percent in May and is up 10 percent for in the past 12 months.

Non-foods rose 0.1 percent during the month and 1.5 percent over 12-months, keeping the overall index down.

Sri Lanka has printed large volumes of money in March and April weakening the exchange rate, but private credit slowed in April.

However attempts are being made to boost credit including with printed money and the budget deficit is set to rise.

Amid record excess liquidity in money markets deposit rates are dropping. (Colombo/July01/2020)