Sri Lanka’s national inflation rises to 4.7% in September

Sri Lanka’s national headline inflation measured through the National Consumer Price Index (NCPI) rose to 4.7 percent in September from 12 months ago from 4.5 percent in August as the non-food prices rose faster than the rise in food prices, the Department of Census and Statistics (DCS) data showed.

The NCPI value for September has been calculated at 113.5, an increase of 0.2 index points from 113.3 in August. 

“This monthly change is due to the increase of expenditure value of food items by 0.07 percent and increase of expenditure value of non-food items by 0.18 percent,” said DCS Director General Dr. Amara Satharasinghe. 
However, the NCPI core-inflation—the increase in prices measured excluding items such as fresh food, energy, transport, rice and coconut—slowed to 5.7 percent in September from a year ago from 6.0 percent in August.     
The NCPI, which has been measuring changes of prices of all provinces from October 2015, is released with a lag of 21 days.  

The Colombo Consumer Price Index (CCPI) for September released earlier this month however showed the rise in prices easing to 3.9 percent from a year ago from 4.0 in August as the prices of food declined.
Under the NCPI, the prices of food items such as banana, papaw, limes, big onions and rice saw faster increase than others. 

On the contrary, the prices of vegetables saw a steeper decline while green chilies and eggs too had a sizeable price decline from August. 
Meanwhile, under the non-food category, alcoholic beverages, tobacco and narcotics prices saw the highest increase in prices during September. 
Sri Lanka is undergoing a structural shift in its economy where the growing middle-income class spends more on services such as leisure and recreational activities than food. 
However, there is still a large section of the population in the bottom of the pyramid that spends almost all of their earnings on food and basic needs. They become further impoverished when the indirect taxes are raised as it is highly regressive in nature. 
Inflation is a hidden tax on the people’s earnings and hit the poor the hardest. 
Meanwhile, the 12-month moving average national inflation in September rose to 3.8 percent from a year ago from 3.6 percent a month earlier while the moving average core-inflation rose to 5.7 percent from 5.6 percent in August.