Inflation drops to 4% in August from nearly 70% year ago

On Aug 31, 2023

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The Department of Census and Statistics said that Sri Lanka’s overall rate of inflation as measured by the Colombo Consumer Price Index (CCPI) dropped further to 4%, for August 2023. This was at 6.3% in July 2023.

It added that food inflation decreased to -4.8% in August 2023 from -1.4% in July 2023.

The CCPI for all items for the month of August 2023 was 190.1 and it records a decrease of 0.1 index points that is 0.02 percentage change compared to the month of July 2023 on an expenditure value basis for which the index was 190.2. This represents a decrease of expenditure value by Rs 39.08 in the “Market Basket”.

Contributions to the change in CCPI month-on-month from July 2023 to August 2023 were mainly due to decrease in Food items by 0.41% and increase in Non Food items by 0.39%. Decreases in value change were reported for Fresh fish (0.18%), Vegetables (0.18%), Milk Powder (0.09%), Green Chillies (0.09%), Eggs (0.06%), Coconuts (0.03%), Biscuits (0.02%), Chicken (0.02%), Dried Fish (0.02%), Green Gram (0.01%), Margarine (0.01%), Coconut oil (0.01%), Dhal Mysore (0.01%) and Red Onions (0.01%).

In contrast increases in value change were reported for Fresh fruits (0.16%), Rice (0.04%), Limes (0.04%), Sugar (0.03%), Gram (0.01%), Cowpea (0.01%), Jak (0.01%), Big Onions (0.01%), Papadam (0.01%), Pepper (0.01%), Dried chilies (0.01%), Tea dust/leaves (0.01%) and Soft drinks (0.01%). Some observers however said that still locally produced Salmon and Fresh milk have not decreased.

Among Non-Food groups, increases in value change were reported for the groups of ‘Transport’ (0.22%), ‘Housing, Water, Electricity, Gas and Other Fuels’ (Water bill) (0.18%), ‘Alcoholic Beverages Tobacco and Narcotic’ (0.06%), ‘Education’ (0.03%) and ‘Miscellaneous Goods and Services’ (0.03%).

While decreases in value change were reported for the groups of ‘Restaurant and Hotels’ (0.06%) ‘Furnishing Household Equipment and Routine Household Maintenance’ (0.03%), ‘Recreation and Culture’ (0.03%), ‘Clothing and Footwear’ (0.02%) and ‘Health’ (0.01%). Meanwhile, the price index of ‘Communication’ group remained unchanged during the month.

Many international observers said that Sri Lanka may be the only country in the world to have the highest rate of inflation of around 70% and then bring it down to a single digit in just one year.

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