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Inflation expected to reach single digit levels by early Q3 2023 – CB

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The Central Bank says that looking ahead, based on the available information, inflation is expected to reach single digit levels by early Q3 2023 and continue the disinflation process.

This disinflation process is supported by the lagged impact of tight monetary and fiscal policies, expected softening of energy and food prices and their spillover effects, and possible repricing of goods and services due to exchange rate appreciation, alongside the favourable impact of statistical base effect.

Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) decreased to 12.0% in June 2023 from 25.2% in May 2023.

The decline in headline inflation is broadly in line with the disinflation path envisaged by the Central Bank of Sri Lanka (CBSL) in April 2023.

After two years, the Food inflation (Y-o-Y) decreased to a single digit level of 4.1% in June 2023 from 21.5% in May 2023, while the Non-Food inflation (Y-o-Y) decreased further to 16.2% in June 2023 from 27.0% in May 2023.

Monthly change of CCPI recorded at 0.02% in June 2023 and this marginal change was due to the netting off of price increases observed in the items of Food category, which was 0.41% by the price decreases observed in the Non-Food category, which was -0.39%.

The core inflation (Y-o-Y), which reflects the underlying inflation in the economy, decreased to 9.8% in June 2023 from 20.3% in May 2023.

Tuesday, July 4, 2023 – 01:00

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