Sri Lanka’s consumer price inflation rate decelerated to 0.8 % year-on-year in September, down from 2.1% in August, as reported by the statistics department. The National Consumer Price Index, which encompasses broader retail price inflation, is published with a 21-day lag each month.
In September, food prices decreased by 5.2 % compared the previous year, following a 5.4 % drop in August, according to the Department of Census and Statistics.
On the other hand, non-food item prices increased by 5.9 % in September, up from a 9 % rise in August. Sri Lanka grappled with record-high inflation following a severe financial crisis, one of the worst in decades. However, inflation has substantially declined since June, partly due to the statistical base effect and the strengthening of the rupee currency, as well as improved harvests.
Despite a recent 18 % increase in household power prices, analysts believe it is unlikely to significantly drive up inflation. Dimantha Mathew, head of research at First Capital Research, stated, “We expect inflation to end the year at about 5%. A small increase is expected as the base effect is coming to an end from September, but the impact from price adjustments is not expected to be severe.
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