Sri Lanka consumer prices hit new record in March 2008

Mar 31, 2008 (LBO) — Consumer prices in Sri Lanka’s capital Colombo measured by a controversial new index hit 23.8 percent in the 12-months to March, while an older index hit a record high of 28.1 percent, government data showed. . The price rises came after at least three months of tight monetary policy and compared against a period in which the older index fell in absolute terms, which tends to exaggerate 12-month inflation due to a statistical bias created by a low base.

The New Colombo Consumer Price Index (CCPI-N), from which an entire expenditure group has been dropped, showed that prices rose 1.7 percent in March.

Breaking Records

The CCPI-N gained 23.8 percent in the past 12 months compared to 21.6 percent in February, hitting the highest level since its creation more than two years ago.

The CCPI-N has been used for monetary policy targets by the island’s central bank since the beginning of this year, but the old index is still favoured by labour unions to index wages.

The older Colombo Consumer Price Index (CCPI) showed a lower 1.5 percent increase in consumer prices in the month of March with the 12-month increase rising to 28.1 percent from 24.0 percent in February.

But in March 20