Inflation drops to its lowest level in five years
The point-to-point change in the Colombo Consumers’ Price Index (CCPI)
dropped sharply to 2.9 percent in April from 5.3 percent in March.
Central Bank Governor Ajith Nivard Cabraal told the Daily News
inflation dropped to 2.9 percent as projected by the Central Bank. This
is the lowest level of inflation ever recorded since January 2004.
“This is mainly due to the tight monetary policy adopted by the
Central Bank and the decline in commodity prices.
There was decline in the commodity prices in the international
market,” he said.
The Central Bank expects that this trend will continue further, he
added. In January, the point-to-point change in the CCPI was marked as
10.7 percent and the CCPI decelerated to a single digit level of 7.6 per
cent in February 2009.
This is also the lowest rate recorded since February 2006. This trend
continued in March with the CCPI dropping to 5.3 percent.
Sri Lanka’s inflation has fallen on tight monetary policy from late
2007 which allowed the country to benefit from an external deflationary
environment.
Inflation reached this low level from a continued deceleration for
the last 10 months from its peak of 28.2 recorded in June 2008. The
annual average inflation rate also decelerated further and recorded 16.7
per cent in March 2009 from its level of 18.6 per cent in the previous
month, a Central Bank release stated.
The CCPI decreased by 0.5 per cent in April 2009 over March 2009.
This was entirely due to the decline in food prices, mainly rice, big
onion, vegetables, coconut and dhal.
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