Sri Lanka urban inflation index up 7.1-pct in June

July 01, 2013 (LBO) – Sri Lanka’s consumer prices rose 7.1 percent in the 12-month to June 2013 from a year earlier, slowing from 9.6 percent in May, an index compiled by a private research house showed. The CAL Urban Index, fell 1.3 percent absolutely during the month, CAL Research, a unit of Sri Lanka’s Capital Alliance group said.

Sri Lanka’s widely tracked Colombo Consumer Price Index showed that consumer prices rose 6.8 percent in June 2013 from a year earlier, slowing from 7.3 percent in May. But the state index showed rise in the month.

The CAL Urban Index tracks 54 percent of households spread around the country earning over 80,000 rupees a month.

The index showed inflation rising as much as 20 percent by January 2013, but has fallen to converge with the official index. It uses a fixed basket using a Laspeyres formula, named after its founder Etienne Laspeyres.

Critics say in many countries, official indices use sophisticated statistical techniques to understate and ‘smoothen’ actual price changes in the economy, which eventually misleads monetary policy.

Sri Lanka has also dropped some items including alcohol from its index, which can reduce short term changes in an inde