Sat, 08 May 2021 Today's Paper

Sri Lanka’s May consumer prices jump after tax hike

2 June 2016 10:40 am - 0     - {{hitsCtrl.values.hits}}

A A A

REUTERS: Sri Lanka’s May consumer prices and core annual inflation rose to multi-month highs, data from the state-run Census and Statistics Department showed on Tuesday after the government increased value-added tax (VAT) to crimp a soaring deficit. Sri Lanka’s consumer prices rose to a 25-month high of 4.8 percent in May from a year earlier, accelerating from the previous month’s 3.1 percent year-on-year rise.

The core annual inflation, which excludes fresh food, energy, transport, rice and coconuts, rose to a 38-month high of 6.6 percent, from the previous month’s 4.5 percent. The government, facing a revenue shortfall and ballooning budget deficit, raised VAT to 15 percent from 11 percent with effect from May 2.

However, the Central Bank said in its monetary policy announcement the increase in the VAT rate and the removal of certain exemptions from VAT and the Nation Building Tax were only expected to have a one-off impact on inflation.

It also said the supply side disruptions due to adverse weather conditions could exert some upward pressure on inflation in the immediate future. “The rise in both headline and core inflation was expected in May, given the upward tax revisions and impact particularly on non-food items,” said Shiran Fernando, an analyst at Colombobased Frontier Research.Sri Lanka’s May... “Pressure will be there. If the inflation goes beyond the Central Bank’s expected level, it will be a concern.” The Central Bank nonetheless expects the inflation to remain in mid single digit levels supported by appropriate demand management policies.

The Central Bank has kept the key policy rates steady - with standing deposit facility (SDF) rate and the standing lending facility rate (SLFR) at 6.50 percent and 8.00 percent, respectively - for three straight months amid private sector credit growth that has been rising despite previous tightening measures. Higher private sector credit growth, which expanded at a near four-year high of 27.7 percent in March year-on-year, has raised concerns over demand-driven inflationary pressure.

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

  Comments - 0

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

 

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




Lester James Peries the Emancipator of Sinhala Cinema

Renowned Sri Lankan Film Maker Lester James Peries passed away three years ag

Emergency berthing of M.V BBC Naples at Hambantota Port: SL Atomic Energy Act violated

Even though Sri Lankan waters appear to be calm, geopolitically speaking, the

“We are just giving it away for Yuan” SLPP Parliamentarian Wijeyadasa Rajapakshe

The basic idea is to safeguard the nation. We are doing politics not for our

Port City Economic Commission Bill; Separate state in the horizon?

Political parties including the Opposition have raised concerns over transpar

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.