Inflation drops below one percent

Climate healthy for investment:

According to Department of Census and Statistics the rate of inflation as measured by the point-to-point change in Colombo Consumers’ Price Index (CCPI) (2002=100), dropped to 0.9 percent in June 2009.

The annual average inflation rate recorded 12.5 percent in June and it was 14.7 per cent in May.

The Colombo Consumer Price Index (CCPI) moved up to 207.8 p in June from 205.1 in May.

Central Bank Governor Ajith Nivard Cabraal told the Daily News that there can be slight changes in inflation. However, country is maintaining a favourable inflation ratio which create healthy environment for economic development.

Maintaining low inflation rate in the county will increase the investor confidence and it will create conducive environment for the investments in the country.

With the decline in the interest rates investors are now keen on investing in Sri Lanka. We expect that interest rates will be further reduced and facilitate investments in the country he said. Sri Lanka’s inflation has been falling steeply since October 2008 on tight monetary policy by the Central Bank. The inflation rate recorded 10.7 per cent in January, 2009, from its peak of 28.2 per cent in June, 2008.

Country’s inflation recorded single digit level of 7.6 per cent in February, 2009. It was dropped further to 5.3 per cent in March, 2009. In April Inflation droped to its lowest level in five years which was recorded as 2.9 percent. Inflation moved up marginally in May to 3.3 percent.