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Inflation dips as food prices soar

Sri Lanka’s inflation measured by Colombo Consumer Price Index decreased to 3% from 4.2% in December last year due to the drop in prices in both food and non-food categories, the Central Bank announced.

But the reality was that Sri Lanka’s soaring food prices at present were due to bad weather and intermediaries, and they will come down in time for April New Year, market sources revealed.

"It is well-known that vegetable prices were increasing rapidly in the last few months," a spokesman of a traders' association in Colombo said.

"The main reason for this was the climate situation which resulted in excess rain in both upcountry and low country regions simultaneously," he added. 

Headline inflation, as measured by the year-on year (Y-o-Y) change in the Colombo Consumer Price Index decreased to 3% in January 2021 from 4.2% in December 2020, Central Bank claimed. 

 This was due to the statistical effect of the high base prevailing during January 2020. Meanwhile, food inflation (Y-o-Y) decreased to 6.8% in January 2021 from 9.2% in December 2020.

Further, non-food inflation (Y-o-Y) decreased to 1.4% in January 2021 from 2.0% in December 2020.

The change in the CCPI measured on an annual average basis decreased to 4.3% in January 2021 from 4.6% in December 2020.

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