Sri Lanka June inflation marginally up at 2.5-pct

Jul 24, 2018 (LBO) – Sri Lanka’s National Consumer Price Index (NCPI) for the month of June 2018 was up at 2.5 percent in June 2018 from a year ago, data from the Department of Census and Statistics (DCS) shows.

The NCPI for all items for the month of June 2018 was 126.5, an increase of 2.2 index points that is percentage of 1.8 was reported in June 2018 compared to that of May 2018 for which the index was 124.3.

This increase represents increase in expenditure value of 723.48 rupees in the “Market Basket”.

Contributions to the inflation in June 2018 from food group and non-food group are 0.26 percent and 2.26 percent  respectively, whilst contributions of these two groups to the inflation in June 2017 were 3.9 percent  and 2.4 percent respectively, resulting in headline inflation of 6.3 percent .

When compared to month on month changes, NCPI in June 2018 has increased to 126.5 from 124.3 reported in May 2018. This shows an increase of 2.2 index points that is 1.8 percent  points in June 2018 as compared to May 2018. This month on month change was contributed by increases of expenditure value of food items by 1.55 percent  and non-food items by 0.26 percent respectively.

The increases in expenditure value of food items were reported for vegetables, fresh fish, green chilies, potatoes, big onions, eggs, milk powder, dried fish, ginger and chicken. However, decreases in expenditure value of food items were reported for coconuts, banana, limes, rice, sugar, pineapple, gram and mangoes.

The increases in expenditure value of non-food items in June 2018, compared to the previous month, was due to the expenditure value increases in groups of ‘Transport’, ‘Restaurants & Hotels’, ‘Miscellaneous Goods and Services’ and ‘Furnishings, Household equipment and Routing household maintenance.’ In the ‘Transport’ group expenditure value increase was mainly due to increases in fuel prices (petrol & diesel) and bus fare.

However, decrease in expenditure value was reported for the group of ‘Alcoholic beverages, Tobacco and Narcotics’ compared to the preceding month. Meanwhile, the expenditure value of ‘Health’, ‘Recreation & Culture’ and ‘Education’ groups remained unchanged during the month.

The NCPI is a macroeconomic indicator compiled to measure inflation which is defined as a sustained increase in the general level of prices for goods and services and it is measured as an annual percentage increase by NCPI. Inflation can be measured in two ways. One measure is Year on Year base or Point to Point inflation (The percentage change in the current month CPI over same month CPI of last year).