Inflation declines in August says Central Bank

Saturday, 30 August 2014 04:48 - - {{hitsCtrl.values.hits}}

Central Bank said yesterday inflation, based on the change in the Colombo Consumers’ Price Index (CCPI) (2006/07=100), which is computed by the Department of Census and Statistics, continued its decelerating trend observed since June 2013 and reached 4.5% in August 2014 compared to 4.7% in July 2014, on an annual average basis. The year-on-year (YoY) inflation also decreased to 3.5% in August 2014 from 3.6% in the previous month, as a result of decrease in price of food items, especially of vegetables. The decline in prices of items in the Food and Non-alcoholic beverages sub-category was the main contributor to the monthly decrease (0.5%) in the CCPI in August 2014. Within the Food category, average prices of almost all the varieties of vegetables, green chilies, potatoes, red onions and some varieties of fish decreased compared to the previous month due to the seasonal factors. Meanwhile, prices of rice, fruits and eggs increased during the month. Within the Non-food category, prices of items in the sub group of Clothing and Footwear; Communication; Recreation and Culture; and Miscellaneous Goods and Services increased.

Prices in all the other sub groups, namely, Housing, Water, Electricity, Gas and other Fuels; Furnishing, Household Equipment and Routine Household Maintenance; Health; Transport; and Education almost remained unchanged during the month compared to the previous month. Core inflation, which indicates the underlying inflation in the economy, increased marginally in August 2014, over the previous month. Accordingly, core inflation, on a YoY and annual average basis, increased to 3.9% and 3.2%, respectively, in August 2014 from 3.7% and 3.1%, respectively, in July 2014.