Sri Lanka inflation rises 5-pct in May

ECONOMYNEXT  – Sri Lanka’s inflation accelerated to 5 percent from a year earlier in May 2019, from 4.5 percent in April, the state statistics office said.

Sri Lanka’s Colombo Consumer Price Index grew 1.6 percent to 129.0 points from 127 points a month earlier.

Sri Lanka’s rupee collapsed in 2018 from 153 to 182 and has been allowed to appreciate to 176 to the US dollar by the central bank.

The central bank usually puts pressure on the rupee by purchasing US dollars from the Treasury with new money.

Food inflation picked up 0.8 percent from a year earlier in May,  while non-food inflation accelerated 6.8 percent.

Sri Lanka’s growth is now sluggish,  despite inflation rising to the middle of the target 4-6 percent band.

Prices have picked up after a prolonged period of liquidity shortage in the money market,  analysts say. (Colombo/May31/2019)