Sri Lankan inflation rose to 9.8 per cent last month (on a year-on-year basis) against 9.3 per cent in June, appearing to edge closer to double digit inflation (10 per cent and over) in the next few months â€“ unless food prices come down.The Central Bank (CB) said inflation, as measured by the Colombo Consumersâ€™ Price Index (CCPI) and computed by the Department of Census and Statistics, increased to 6 per cent in July 2012, on an annual average basis, from 5.8 per cent in the previous month.
It said this was mainly due to a hike in food prices. Core inflation continued its decelerating trend for the 10th consecutive month and reached 5.5 per cent in July 2012, on an annual average basis, from 5.7 per cent in June 2012, while increasing on a YoY basis to 6 per cent in July 2012 from 5.8 per cent in the previous month.
Food prices increase
The contribution to the monthly increase in the Index came mainly from price increases in the Food and Non-Alcoholic Beverages category (by 1.6 per cent) followed by the Non-Food category (by 0.3 per cent). The increase in the prices of rice, coconut, fresh fish, sugar, fruits, vegetables and prepared food contributed to the increase in the food category of CCPI. The upward revision in the prices of wheat flour, fuel and milk powder has had an impact on the prices of prepared foods with a time lag, the CB said.
However, a decline in the prices of red onions, big onions and limes was also reported during the month. (JDS)