Sri Lanka inflation hits high of 5.6-pct in October 2019

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Nov 22, 2019 (LBO) – The National Consumer Price Index (NCPI) for all items for the month of October 2019 was 131.9, an increase of 1.3 index points or 1.0 percentage compared to September 2019.

The overall rate of inflation as measured by NCPI on year‐on‐year basis is 5.6 percent in October 2019 and inflation calculated for  September 2019  was 5.0 percent %.   

Year‐on‐year inflation of food group has increased from  4.9 percent in September 2019 to 7.3 percent in October 2019 and that of non‐food group has decreased from 5.1 percent to 4.3 percent during this month.

This increase represents an increase in expenditure value of Rs. 410.13 in the “Market Basket”.

The increase in the index point by 0.98 percent was due to the index values increase of food items by 0.99 percent and index values decrease of non‐food items by 0.01 percent.   

The increases in index values were reported for big onions(0.45%), rice (0.33%), vegetables (0.20%), red onions (0.11%), milk powder (0.09%), green chilies (0.03%), chilly powder (0.02%) and coconuts (0.01%).

However, decreases in index values were reported for fresh fish (0.13%), potatoes (0.05%), banana (0.05%), papaw (0.04%), limes (0.02%) and mysore dhal (0.01%).         

Contribution of non‐food items: ‐0.01% the decreases in index values of non‐food groups in October 2019 compared to the previous month was due to the price decreases in groups of items ‘transport’ (airline fare & petrol) (0.02%), ‘health’ (payments to medical laboratory tests) (0.02%) and ‘housing, water, electricity, gas and other fuels’(LP Gas) (0.02%).

However, increases in prices were reported in groups of ‘alcoholic beverages, tobacco & narcotics’ (Arecanuts) (0.01%), ‘miscellaneous goods and services’ (0.01%), ‘clothing and footwear’ (0.01%) and ‘furnishings, household equipment and routing household maintenance’ (0.01%) compared to the preceding month.

Further, very slight price increase was reported in group of ‘recreation and culture’.

Meanwhile, the price index of ‘communication’, ‘education’ and ‘restaurants and hotels’ 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 the year‐on‐year base or point‐ to‐point inflation (the percentage change in the current month CPI over same month CPI of last year).

The other measure is moving average inflation (the percentage difference between the average price indices of last 12 months & the average Price Indices of previous 12 months).

The moving average inflation for the month of October 2019 is 2.8%. The corresponding rate for the month of September 2019 was 2.3%.