Inflation soars to record 12.1% in December as per CCPI

The Headline inflation, as measured by the year-on-year (YOY) change in the Colombo Consumer Price Index (CCP1), increased to a record 12.1% in December 2021 from 9.9% in November 2021.

On an annual average basis, the CCPI increased to 6% in December 2021 from 5.3% in November 2021. 

Central Bank said an in-depth analysis of the key drivers of current inflation suggests that a large component of inflation is driven by supply-side factors.

It added that a detailed explanation in this regard will be published shortly.

The CCPI's spike comes hot on the heels of the Department of Census and Statistics (DCS) last month announcing that inflation, as measured by the National Consumer Price Index (NCPI) in November, moved to the double-digit level of 11.1% for the first time in over a decade.

CBSL said inflation was driven by monthly increases in prices of items in both food and non-food categories. Subsequently, food inflation (YOY) increased to 22.1% in December 2021 from 17.5% in November 2021, while non-food inflation (YOY) increased to 7.5% in December 2021 from 6.4% in November 2021.

Monthly change of CCPI was recorded at 2.64% in December 2021 due to price increases observed in items of both food and non-food categories, which were 1.80% and 0.84%, respectively.

Accordingly, within the food category, prominent increases were observed in prices of vegetables, fresh fish, and green chillies. Further, prices of items in the non-food category recorded increases mainly due to price increases observed in the Restaurants and Hotels, Transport (petrol, diesel, taxi/three-wheeler charges) and Alcoholic Beverages and Tobacco (Arrack, Cigarettes) sub-categories during the month.

The core inflation (YOY), which reflects the underlying inflation in the economy, increased to 8.3% in December 2021 from 7% in November 2021. 

Moreover, annual average core inflation increased to 4.4% in December 2021 from 4% in November 2021.