Sept 02, 2013 (LBO) – Inflation in Sri Lanka’s key cities rose 9.9 percent in August 2013 from a year earlier accelerating from 6.1 percent in July, a price index compiled by private citizens showed. The CAL Urban Index, compiled by an investment research house, rose 2.4 percent in August, after falling 1.4 percent in July.
An official index compiled by state statistics office showed prices falling in absolute terms in August while the annual increase edged up to 6.3 percent from 6.1 percent.
The index by private citizens is based on straightforward statistical methods and is more volatile.
Most official indices almost all countries contain statistical techniques to smoothen volatility and sometimes understate inflation, including dropping volatile items (food and energy) and ignoring changes above a certain threshold rise.
Reducing traded items in the basket, which respond quicker to monetary policy and increasing the share of non-traded items can also reduce the volatility of an index.