Sri Lanka January inflation at 3.7-pct

inflation1

The overall rate of inflation as measured by NCPI on Year-on-Year basis is 3.7 percent in January 2021 and inflation calculated for December 2020 was 4.6 percent.

Year-on-Year inflation of both food group and non food group have decreased from 7.5 percent in December 2020 to 5.9 percent in January 2021 and from 2.2 percent in December 2020 to 1.8 percent in January 2021 respectively.

The NCPI for all items for the month of January 2021 was 142.1. An increase of 0.9 index points or 0.6 percentage compared to December 2020 for which the index was 141.2.

This increase represents increase in expenditure value of Rs. 282.42 in the Monthly changes of index numbers, expenditure values and percentage change of index numbers are given in the following table (Table 01).

The increases in index values were reported for Rice(0.16%), Coconuts(0.15%), Green chilies(0.15%), Vegetables (0.15%), Red onions(0.08%), Fresh fish(0.05%), Fresh fruits(0.03%), Turmeric powder(0.03%), Coconut oil(0.01%), Tamarind(0.01%) and Dried chilies(0.01%). However, decreases in index values were reported for Big onions (0.20%), Potatoes (0.13%), Eggs(0.05%), Manioc(0.01%) and Chicken (0.01%). 1.1.2.

Contribution of Non-food items: 0.14% The increases in index values of non-food groups in January 2021 compared to the previous month was mainly due to the price month. Meanwhile, the price in 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).