March national prices quicken over higher energy costs

Consumer prices measured by the National Consumer Price Index (NCPI) partly reflected the economy-wide price increases during March in response to the thrice raised fuel prices in response to the war in the Middle East.

For instance, the nation-wide consumer prices rose 2.4 percent in March 2026 from a year ago levels, accelerating from the 1.6 percent increase seen through February before the Iran war sent the prices of almost everything from staples to discretionary to durables higher.

Prices measured on the monthly basis rose 0.7 percent in March turning from a 0.9 percent decline in the month before as the soaring energy prices had a sizable impact on overall prices.

he Central Bank in its Annual Review reiterated they expect their headline inflation to reach 5 percent, much earlier than they had earlier anticipated due to the pass through effects of the fuel and electricity prices.

Meanwhile, core prices measured barring the often volatile food, energy and transport rose by 2.7 percent in the twelve months through March, rising from 2.2 percent through February, reflecting the firming up of the underlying prices in the economy.

However, quite surprisingly, the food price inflation softened somewhat as such prices rose by 0.7 percent in March, slowing from 1.1 percent rise in February. The monthly prices too fell 0.6 percent.

Prices of vegetables, fresh fish, coconuts, green chilies, limes, onions and the likes saw prices declining while the prices of chicken, dried fish, coconut oil, eggs, fresh fruits and the likes saw rising prices during March from a month ago.

Meanwhile, non-food prices saw the most increase in March, rising 3.8 percent annually and 1.8 percent monthly reflecting the impact of fuel and gas price hikes.

In fact all sub-categories under the non-food category climbed higher in March from a month ago with the transport sub-category rising the most.

April prices could even be higher as the electricity prices were also raised and the subsequently concluded International Monetary Fund programme review said to raise the prices of fuel and electricity further to fully reflect the true costs.

Prolonged higher global oil prices and a persistently higher inflation above 5 percent levels could cause the Central Bank to sound a bit more hawkish than at present.