CCPI-based headline inflation remains negative in December

Wednesday, 1 January 2025 00:08 - - {{hitsCtrl.values.hits}}

In line with the Central Bank’s near term projections, headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI) remained in the negative territory for the fourth consecutive month, recording a deflation of 1.7% in December 2024 compared to the deflation of 2.1% in November 2024.

Central Bank said non-food deflation (Y-o-Y) moderated to 3.0% in December 2024 from 3.3% in November 2024. Food inflation (Y-o-Y) showed a marginal uptick recording 0.8% in December 2024 from 0.6% November 2024.

On a month-on-month basis, the CCPI recorded an increase of 1.19% in December 2024 due to the combined effect of 1.24% increase in the prices of items in the Food category and 0.06% reduction in the prices of items in the non-food category.

CBSL also said core inflation (Y-o-Y), which reflects the underlying inflation trends in the economy, remained unchanged at 2.7% in December 2024.

Looking ahead, CBSL said headline inflation is expected to remain in the negative territory in the next few months, driven by the persistent effects of significant downward adjustments in energy prices and the reduction in volatile food prices, coupled with the considerable base effect, owing to the price increases experienced in early 2024 due to tax amendments.

“Nevertheless, inflation is expected to turn positive thereafter and gradually align with the targeted level of 5% over the medium term, aided by appropriate policy measures,” it added.