Sri Lanka core inflation continues embarrassing climb

Oct 07, 2008 (LBO) – Sri Lanka’s controversial ‘core’ inflation index, which is claimed to be more responsive to monetary action, continued its relentless upward climb even as headline inflation moderated amid tight policy. In an earlier era, in France, paper money ‘central bankers’ who pushed food commodity prices up, created high inflation and economic collapse through money printing had been guillotined in public for the damage they caused to the country and ordinary people.

The central bank said ‘headline’ inflation shown by the Colombo Consumer Price Index (CCPI) – which is under fire for understating inflation and being weighted on a political whim – has moved down to 24.3 percent in September from 24.9 percent in August.

In the month of September the CCPI index increased 0.4 percent in absolute terms, despite foods falling 0.3 percent amidst a global fall in commodity prices.

Core inflation, which excluded food and energy, which the central bank said is “more responsive to demand factors” moved up 1.1 percent in the month to climb to 18.7 percent from 17.4 percent over the 12-month to September.

Core inflation indices had come under fire worldwide not only for understating inflation and deceiving t