June 29, 2007 (LBO) – Sri Lanka’s inflation rose 3.2 percent in June, though the 12-month increase in consumer prices fell to 13.0 percent from 13.7 percent, the government’s statistics office said. The seasonally adjusted increase in the Colombo Consumer Prices fell to 17.0 percent from 17.4 percent in May, the Department of Census and Statistics said.
In May inflation rose 3.0 percent, following a massive increase in reserve money in the April holiday month which analysts say is a structural problem in Sri Lanka which needs to be addressed.
Inflation of 3.0 percent is higher than the entire annual inflation of a country with a well-managed economy.
In 2006, a year which saw high volumes of money printing, inflation in May rose 5.4 percent and June 3.9 percent, slightly higher than the June inflation this year.
The Department of Census and Statistics said most of the price increased came from locally produced agricultural consumer goods. The department claimed the vegetables were in short supply in market is Colombo.
A survey of financial institutions in Colombo active in the debt markets by the Bloomberg news agency found that the average 12-mont