ECONOMYNEXT – Inflation in Sri Lanka is expected to remain high next year as anticipated fuel price hikes push up other prices, the Asian Development Bank has said.
The island’s inflation had already been pushed up beyond anticipated levels owing to higher food prices, the bank said in its latest update to the Asian Development Outlook (ADO) 2017, which forecast firmer growth for Asia.
In South Asia, inflation below expectations in India prompts a downward revision to the 2017 forecast, to 4.0% from 4.2% in the previous update, according to the ADB.
“Elsewhere, projections for inflation remain in line with those in the Update for the rest of the subregion except Sri Lanka, where a sharp spike in food inflation pushed consumer prices above earlier expectations,” the ADO update said.
“The subregional inflation forecast for 2018 is maintained at 4.7%, as projections are unchanged for all individual economies except Sri Lanka, where expected higher fuel prices next year will likely exert upward pressure on other prices as well.”
In India, the ADB said, inflation is still expected to inch up to 4.6% in FY2018, driven by an uptick in fuel prices and higher aggregate demand.
(COLOMBO, December 18, 2017)