Consumer prices ease in January; core inflation at 32-month high

A vendor cleans red onions at his stall at main market in Colombo 29 January, 2016. Sri Lanka’s consumer prices in January rose 0.9 percent from a year earlier, slowing from the previous month’s 2.8 percent, data from the Department of Census and Statistics showed on Friday. REUTERS/Dinuka Liyanawatte

Reuters: Sri Lanka’s consumer prices in January rose 0.9% from a year earlier, slowing from the previous month’s 2.8%, data from the Department of Census and Statistics showed on Friday. 

However, annual core inflation hit a 32-month high.

On a month-on-month basis, the Colombo Consumer Price Index (CCPI) fell 0.2%. In December, it rose 0.3%, slowing from a 10-month high of 1.4% in the previous month. 

January inflation, as measured on a 12-month moving average basis, was 0.7%, easing from December’s 0.9%.  Core annual inflation, which excludes fresh food, energy, transport, rice and coconuts, edged up to a 32-month high of 4.6% in January from 4.5% in December.  It hit a record low of 0.8% in February 2015.

Subhashini Abeyasinghe, a senior researcher with Verite Research, said the rise in core inflation was also due to the exchange rate impact.

“But overall inflation should ease in the future with good rains and lower oil prices. The government has the room to pass the oil and energy price reduction to people,” she said.  The rupee has declined 6.4% since the central bank floated the currency on 4 September. It fell 9% in 2015.