Sri Lanka July inflation up sharply

July 31, 2007 (LBO) – Sri Lanka’s consumer prices shot up to 17.6 percent in the year to July with the index growing 2.8 percent in the past 30 days, the government’s statistics office said Tuesday. .

In the year to June inflation was only 13.0 percent, but monthly inflation has been edging up on each of the past three months sparking concerns that monetary policy had been loose enough since April to re-ignite demand pressure.

Adding to such fears the Central Bank has also tried to fix benchmark Treasury bill rates at 17.4 percent.

In May inflation spiked 3.0 percent, in June another 3.2 percent. In July the index gained 2.8 percent.

Analysts have pointed out that the month-on-month inflation in each of the past three months was equal to the year-on-year inflation in most other countries.

The statistics office said the Colombo Consumer Price Index (CCPI) grew 152.2 points to 5344.3 in July.

Of this, ‘fuel and light’ increased by 84.3 points accounting for 1.5 percent of the 2.8 percent index gain for the month.

Sri Lanka’s petroleum retailers raised the price of kerosene, which is an index component, a few hour after June inflation data was released.

The mo