Inflation accelerates to 1.5% in October

• CB expecting “transitory” increase in inflation beyond its 5% target due to higher administratively determined prices or taxes

Sri Lanka’s official headline inflation measured by the Colombo Consumer Price Index (CCPI) accelerated to 1.5 percent in October on a year-on-year (YoY) basis from 1.3 percent a month ago, the data released by the Department of Census and Statistics showed.
The food deflation continued for the fourth consecutive month and remained unchanged at 5.2 percent in October compared to the previous month.
The non-food inflation increased to 4.9 percent in October compared to 4.7 percent a month ago. The core inflation, which reflects the underlying inflation in the economy, decreased to 1.2 percent in October from 1.9 percent  in September.

Central Bank said this slight increase in the headline inflation is mostly in line with its projections. “Inflation is expected to stabilise around the targeted level of 5 percent over the medium term, supported by appropriate policy measures and well-anchored inflation expectations,” the Central Bank said.
“Nevertheless, should there be any upward increases to administratively determined prices, tariffs or taxes by the government, a transitory increase in inflation beyond the target is probable in the short term,” it added.