Sri Lanka’s headline inflation decreased in March

Apr 22, 2020 (LBO) – Sri Lanka’s headline inflation as measured by the year-on-year change in the National Consumer Price Index has decreased to 7.0 percent in March 2020 from 8.1 percent in February 2020.

As per the Statistics Department, this was driven by a monthly decrease in prices of the items in the Food category. Accordingly, Food inflation (Y-o-Y) declined to 14.1 percent in March 2020 from 16.3 percent in February 2020.

Meanwhile, Non-food inflation (Y-o-Y) recorded at 1.8 percent in March 2020. The change in the NCPI measured on an annual average basis increased to 4.9 percent in March 2020 from 4.5 percent in February 2020.

Monthly change of NCPI recorded at -1.3 percent in March 2020 due to declines observed in prices of items in the Food category, driven by the seasonal supply of food crops and timely intervention of the government to reduce prices of certain food items amid COVID-19 outbreak.

Accordingly, within the Food category, prices of vegetables, red onions, rice, and dhal recorded decreases in March 2020. However, within the Non-Food category, prices of the items in Alcoholic Beverages and Tobacco (beetle leaves); and Health (payments to medical tests) sub-categories recorded increases.

Continuing its decreasing trend for the fifth consecutive month, the core inflation (Y-O-Y) decreased further to 3.2 percent in March 2020 from 3.4 percent in February 2020. Meanwhile, annual average core inflation decreased to 5.2 percent in March 2020 from 5.5 percent in February 2020.