Inflation dips to 3% in January

Headline inflation, as measured by the year-on-year (YOY) change in the Colombo Consumer Price Index (CCPI, 2013=100), decreased to 3% in January from 4.2% in December 2020. 

The Central Bank said this was due to the statistical effect of the high base prevalent during January 2020. Meanwhile, Food inflation (YOY) decreased to 6.8% in January from 9.2% in December 2020. Further, Non-food inflation (YOY) decreased to 1.4% in January from 2% in December 2020.

The change in the CCPI measured on an annual average basis decreased to 4.3% in January from 4.6% in December 2020.

Monthly change of CCPI was recorded at 0.51% in January. This was due to price increases observed in items of both Food and Non-food categories. Moreover, monthly changes of Food and Non-food categories were recorded at 0.29% and 0.22%, respectively, in January. Accordingly, within the Food category, prices of red onion, coconut and sea fish increased in January.

However, the price of big onion recorded a decline during the month. Meanwhile, prices of items in the Non-food category recorded an increase during the month mainly due to a price increase observed in the Health (payments to private hospitals) sub-category.

The core inflation (YOY), which reflects the underlying inflation in the economy, decreased to 2.7% in January from 3.5% in December 2020. However, annual average core inflation remained unchanged at 3.1% in January.