CB says inflation down to 0.2% in July

Inflation, as measured by the change in the Colombo Consumers’ Price Index (CCPI) (2006/07=100), which is compiled by the Department of Census and Statistics, declined to -0.2%, on an year-on-year basis in July 2015, from 0.1% recorded in June 2015. 

Annual average inflation declined from 1.7% in June 2015 to 1.3% in July 2015. CCPI increased by 0.7% from June to July 2015.

The decline recorded on year-on year basis was mainly due the high base that prevailed in July 2014, prior to significant downward revisions of energy prices observed on several occasions since September 2014.

The monthly increase in CCPI was caused by increases in prices of items in both the Food and Non-food categories. Prices of some varieties of vegetables, fresh fish, meat, fruits, potatoes, green chilies and red onions increased during July 2015. However, prices of coconuts, big onions and lime decreased during the month. Within the Non-food category, prices in clothing and footwear, furnishing, household equipment and routine household maintenance, transport and recreation and culture subcategories increased. 

Due to the partial effect of the downward revision of LP Gas prices with effect from 14.07.2015, the housing, water, electricity, gas and other fuels subcategory recorded a decline. All other subcategories, namely, health, communication, education and miscellaneous goods and services remained unchanged during the month.

Core inflation, which reflects the underlying inflation in the economy, increased to 3.5% in July 2015, from 2.8% in June 2015 on a year-on-year basis. Annual average core inflation remained unchanged at 2.8%, as recorded in the previous month.