ECONOMYNEXT – Sri Lanka’s Advocata Institute has launched a Buth Curry Index, which tracks the prices of several foods items widely used in an average ‘rice and curry’ meal.
Naqiya Shiraz, a research executive at the Advocata Institute said the BCI will track the price of Samba rice, beans, pumpkin, tomatoes, brinjals, coconut, green chillies and fish.
“The idea behind the BCI is that in Sri Lanka the cost of living is a concern,” Economist Deshal de Mel was quoted as saying at the launch of the index.
“The inflation in Sri Lanka has been of single-digit levels for the last two years but it is still a concern for the public.
“So Advocata’s Bath Curry Indicator is similar to the ‘Big Mac Index’ by The Economist. It is simple and real.””
The Big Mac Index tracks purchasing power parity across countries.
Sri Lanka’s inflation index has been progressively revised to include non-traded services such as education and telephone bills, whose rising weight has understated inflation compared to the 1980s and early 1990s, when more food was in the basket that was tracked.
However individual food sub-components tend to show sharper changes in price levels.
A Mercantilist concept has also evolved over the years that inflation is different for different people.
Authorities in Sri Lanka have claimed that links between monetary aggregates and depreciation that previously existed no longer held after changing index.
Sri Lanka’s inflation is partly driven by Federal Reserve, as the rupee is loosely pegged to the dollar. Depreciation tend be reflected faster in traded goods. (Colombo/Apr08/2021)