Sri Lanka inflation accelerates to 2.8-pct in November

Nov 30, 2009 (LBO) – Consumer prices in Sri Lanka’s capital Colombo rose 2.8 percent in November 2009 from a year earlier, against 1.4 percent in October, indicating inflation is picking up, the government’s statistics office and analysts said. The statistics office said that in November 2009, the 12-month moving average, a seasonally adjusted inflation indicator averaged over two years, fell to 4.1 percent from 5.2 percent in October 2009, and 6.6 percent in September. In the month of November the revised Colombo Consumer Price Index (CCPI) rose 0.8 percent, higher than the October rise of 0.4 percent and the 0.2 percent rise in September.

In November last year prices fell 0.7 percent, which also tends to exaggerate the base effect.

Central Bank Governor Nivard Cabraal has said the monetary authority was expecting 2009 to end with inflation at 3.5 percent.

The Central Bank has kept monetary policy tight over 2008 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.

Cabraal has said that inflationary expectations were low but independent economists have warned against c