Drop in price levels in August

The price level in the month of August, reflecting the historical seasonal pattern, recorded a drop relative to the previous month, the Central Bank said yesterday.

Improved supply of key agricultural commodities, partly due to the Yala harvest coming to the market, was the major contributory factor for this behaviour.

However, the annual average inflation rose further to 12.8 per cent and 11.3 per cent, respectively, as per the CCPI and CDCPI in August 2005, but the rate of increase appeared to be decelerating, the Bank said.

The CCPI, the official measure of price changes within the Colombo Municipality for the lowest 40 per cent of income groups published by the Government Department of Census and Statistics, registered 4032.1 in August 2005, indicating a decrease of 1.0 per cent over the previous month.

The increase in the index in August 2005 over August 2004 (the point to point change) was 10.9 per cent compared to 10.8 per cent in July 2005 and 10.5 per cent in August 2004. Accordingly, the annual average increase of the index rose marginally to 12.8 per cent from 12.7 per cent in July 2005.

The CDCPI, computed by the Central Bank of Sri Lanka, for the lowest 40 per cent of income earning households covering the Colombo District, decreased by 1.2 per cent in August 2005 over July 2005.

The point to point increase was 9.2 per cent compared to 10.8 per cent in July 2005 and 6.2 per cent in August 2004. Accordingly, the annual average increase of the index rose to 11.3 per cent in August 2005 from 11.1 per cent in July 2005.

The Food category with its higher representation in the index was the major contributor to the monthly decrease of the CDCPI. Coconut, certain condiments including dried chillies, green chillies and onions, coconut oil, most varieties of fish and vegetables, chicken and potatoes registered significant price decreases.

Meanwhile, wheat flour, most varieties of fruits, a few varieties of vegetables, eggs, prepared food, certain condiments and certain packeted food items experienced price increases during the month. Within the Food sub index, the annual average increase recorded for the price of rice (kekulu), which bears a significant weight in the index was around 16 per cent.