Inflation down

Inflation, as measured by the Colombo Consumers' Price Index (CCPI) (2002=100), computed by the Census and Statistics Department, decreased to 6.8 percent in January 2011, on a year-on-year basis, from 6.9 percent in December 2010, mainly due to the base effect.

Meanwhile, the annual average inflation increased to 6.0 percent in January from 5.9 percent in the previous month, as a result of the price developments in the preceding twelve month period.

The core inflation, which measures the price movement of non-food and non-energy items of the CCPI basket, decreased to 3.6 per cent on a year-on-year basis and 6.0 percent on an annual average basis in January 2011 from that of 5.6 percent and 6.3 percent respectively, in December 2010.

The contribution to the monthly increase of 1.3 percent in the Index came mainly from price increases in the sub category of Food and non-alcoholic beverages (2.1 percent). Within the food sub category price increases were registered for vegetables, fruits, coconut, coconut oil, red onions and fish and sea food, primarily led by the supply shortages resulted from heavy rains. However, prices of rice, eggs, chicken, big onions and sugar declined. Further, price increases were recorded in the sub categories of clothing and footwear (2.1 per cent); Education (1.6 per cent); Health (0.3 percent); Furnishing, household equipment and routine household maintenance (0.1 percent); and Miscellaneous goods and services (0.9 percent). A marginal increase was also observed in the sub category of housing, water, electricity, gas and other fuels due to upward revision in the price of gas. Meanwhile prices in the sub categories of recreation and culture; transport; and communication remained unchanged during the month.