CCPI-based headline inflation decelerates in August

Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI), had decelerated sharply to 0.5% in August 2024 from 2.4% in July 2024. 

The Central Bank said this deceleration in headline inflation is broadly in line with projections. 

It said Food inflation (Y-o-Y) decelerated to 0.8% in August 2024 from 1.5% in July 2024. Further, Non-Food inflation (Y-o-Y) also decelerated sharply to 0.4% in August 2024 from 2.8% in July 2024.

On a month-on-month basis, the CCPI recorded a decline of 1.85% in August 2024 due to the price decreases of 0.64% observed in items of the Food category, and the price decreases of 1.21% observed in items of the Non-Food category.

The core inflation (Y-o-Y), which reflects underlying inflation trends in the economy, declined to 3.6% in August 2024 from 4.4% in July 2024. 

“Based on the available data, inflation is projected to remain notably below the target of 5% in the forthcoming months. Over the medium term, inflation is expected to gradually align with and remain around the targeted level, aided by appropriate policy measures,” the CBSL added.