Sri Lanka’s consumer prices rose 3.4 percent in November from a year earlier, slowing down from the previous month’s 4.2 percent, data from the Census and Statistics Department showed. The consumer prices had hit a 32-month high of 6 percent in June. The core annual inflation, which excludes fresh food, energy, transport, rice and coconuts, rose 5.1 percent in November compared to previous month’s 5.7 percent. It hit a 38-month high of 6.6 percent in May. On a month-on-month basis, the Colombo Consumer Price Index (CCPI) rose at a steady pace of 0.6 percent in November. It fell 0.3 percent in September. November inflation, as measured on a 12-month moving average basis, hit a two-year high of 3.6 percent.
The Monetary Board appears to think that the recent adjustments made to the tax structure will only have a one-off impact on inflation from November while the budget 2017 will also have a favourable impact on inflation. However, inflation is expected to remain stable at midsingle digit level in the period ahead.