Sri Lanka inflation accelerates in December

Dec 30, 2009 (LBO) – Consumer prices in Sri Lanka’s capital Colombo rose 4.8 percent in December from a year ago, against 2.8 percent in November, indicating inflation is picking up, the government’s statistics office and analysts said. In the month of December the revised Colombo Consumer Price Index (CCPI) rose 1.2 percent, higher than the November rise of 0.8 percent, and 0.4 percent rise in October.

Year-end inflation, according to the 12-month moving average, was 3.4 percent, slightly lower than the Central Bank forecast, compared with 22.6 percent in December 2008.

Analysts said the year-on-year rise in inflation in December to 4.8 percent was the highest since May 2009.

The Central Bank kept monetary policy tight until recent months in an effort to rein in inflation which hit 28 percent in the middle of last year.

But it has loosened up in recent months as inflation fell, reducing benchmark lending rates and asking banks to cut rates.