Consumer prices ease in December

Consumer prices in December rose 2.8% from a year earlier, data from the Department of Census and Statistics showed . 

In November, prices were up 3.1% from a year earlier, the highest since January. 

On a month-on-month basis, the Colombo Consumer Price Index (CCPI) in December rose 0.3%. In November, it stood at a 10-month high of 1.4%. 

December inflation, as measured on a 12-month moving average basis, was 0.9%, steady from a month earlier. 

Following is the full text of the statement issued by the Department.

Month on Month (M on M) Change of CCPI:

The CCPI for all items for the month of December 2015 was 185.2 recording an increase of 0.5 index points or percentage of 0.26 compared to the month of November 2015 for which the index was 184.7 This increase represents an expenditure value of Rs.136.85 in the “Market Basket”. 

Contributions to the increase in CCPI from November 2015 to December 2015 are given in Table 2. The index point increased by 0.26% and this was due to the increase of food items by 0.4% and decrease of non‐food items by 0.13%.

Contribution of Food and non alcoholic beverages items: 0.4%  

Increase in value changes in index were reported for Vegetables (0.64%), Green chilies (0.24%), Rice (0.12%), Eggs (0.03%), Yoghurt (0.02%), Red Onions (0.02%), Tamarind (0.01%) and Coconut (0.01%). Price decreases were reported for Big Onions (0.17%), Limes (0.10%), Mangoes (0.09%), Dried fish (0.08%), Potatoes (0.06%), Fresh fish (0.06%), Dhal (0.04%), Chicken (0.03%), Papaw (0.03%), Sugar (0.02%), Milk powder (0.02%), Maldives fish (0.01%) and Beef (0.01%).

Contribution of non food items: -0.13% 

Decrease in value changes was reported for ‘Housing, water, Electricity, Gas and Other Fuels’ (0.15%)  due to price decreases of Gas and Kerosene oil. But Maintenance & Repair of Dwellings in the same group showed an increase.

 Slight price increases were reported for the groups of ‘Clothing and Footwear’ (0.01%) and ‘Furnishings, Household Equipment & Routine Household Maintenance’ (0.01%). 

INFLATION:

The CCPI is an economic indicator constructed to measure inflation which is defined as percentage change

in CCPI over the year. There are two measures of inflation in general use.  One measure is Year on Year

base or Point to Point inflation (The percentage change in the CPI during the last 12 months). The other

measure is Moving Average Inflation (The percentage difference between the average Price Index of last

12 months & the average Price Index of previous 12 months).

Year on Year (YoY) Inflation

YoY inflation of Food Group has decreased from 5.2% in November 2015 to 4.2% in December 2015 while Non‐food Group increased by 1.1%  to 1.5% during this period. The overall rate of inflation as measured by CCPI on YoY basis is 2.8% in December 2015 and inflation calculated for November 2015 was 3.1% (Table3).

Contribution to Y on Y inflation:

For the month of December 2015, on year to year basis, contribution to inflation by food

commodities was 1.99%.  

Contribution of Non food items was 0.77%. This was mainly due to value change increases in

Clothing and Footwear (0.57%), Health (0.79%) and Education (0.24%) groups while value change  

decreases  of Housing, Water, Electricity, Gas & Other Fuels and Transport groups. The amount of decrease in ‘Housing, Water, Electricity, Gas & Other Fuels’ has been mainly due to the price decline

of L.P. Gas (0.72%) and Kerosene Oil (0.17%). Also the amount of decrease in ‘Transport’ has been

mainly due to the price decline of Bus fare (0.21%) and Petrol & Diesel (0.86%). The net effect of

above items has led to the increase in Non‐food sub index.

Moving Average Inflation

The moving average inflation rate for the month of December 2015 is 0.9%. The corresponding

rate for the month of November 2015 was also 0.9%.

The Department of Census and Statistics (DCS) is the authorized agency to compile Colombo Consumer

Price Index (CCPI).The CCPI is compiled to indicate average changes in the prices of goods and services

purchased by households in urban areas of Colombo district. Prices for items in the Colombo Consumer

Price Index are collected from 14 selected centers located in Colombo namely Pettah, Maradana,

Wellawatta, Dematagoda, Grandpass, Borella, Kirulapone, Dehiwala, Kotte, Nugegoda, Kolonnawa,

Rathmalana, and Narahenpita and Rathmalana dedicated economic centers. Prices are collected weekly

from the outlets located within each of the above market areas including Co‐operative store and a

supermarket. The consumer basket includes 373 items which represent the typical urban households’

consumption expenditure. The CPI weights are derived from the Household Income and Expenditure

Survey (HIES) 2006/07.

DCS commenced releasing National Consumer Price Index (NCPI) from October 2015 with a time lag of

21 days. Accordingly, the NCPI for the month of November 2015 was released on 21 December 2015.  

Fag prices up with 2016 Budget move

The Ceylon Tobacco Company (CTC) announced that prices of cigarettes have been increased with effect from yesterday.

The increase was a result of Government raising the Nation Building Tax (NBT) from 2% to 4% with effect from 1 January as per Budget 2016.  

The prices of cigarettes have been increased by Rs. 2 and Re. 1 depending on certain brands.

The Daily FT learns that the price of Gold Leaf and Bristol  has been increased by Rs.2 thereby bringing the new price to Rs.35 and Rs.22 respectively, while the price of Capstan has been increased by Re. 1, bringing the new price to Rs.11.

Previously, the Government increased cigarette prices in October last year, with excise duty on 1000 cigarettes of the Gold Leaf variety being increased by Rs. 2,140 to Rs. 23,750, raising the price of a cigarette by Rs. 3.

In the first nine months of 2015, Government raised Rs. 68.6 billion via tobacco taxation up by 27% in the corresponding period of 2014.