Sri Lanka’s food inflation soars to an unbelievable 50%

If Sri Lanka’s annual inflation was in the region of 15 per cent it could have stirred anxiety debate and discussion.

However when inflation surges to 50 percent, then it’s a situation of shock,  worry and anxiety and wondering where Sri Lanka is heading as economic problems unravel, one after the other – with no respite to the poor masses and the equally affected middle class urban population

According to the latest data, headline inflation, as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100)1 increased to 45.3 per cent in May 2022 from 33.8 per cent in April 2022. This increase in Y-o-Y inflation was driven by the monthly increases of both Food and Non-Food categories, according to a Central Bank statement.

Accordingly, food inflation (Y-o-Y) increased to 58 per cent in May 2022 from 45.1 per cent in April 2022, while Non-Food inflation (Y-o-Y) increased to 34.2 per cent in May 2022 from 23.9 per cent in April 2022.

The monthly change of NCPI was recorded at 9.67 per cent in May 2022 due to price increases observed in items of both Food and Non-Food categories which were 5.41 per cent and 4.26 per cent, respectively.

Accordingly, within the Food category, prices of rice, milk powder, vegetables, fresh fish and bread recorded increases during the month. Further, within the Non-Food category, increases were observed in prices of Transport (Petrol, diesel and bus fare), Housing, Water, Electricity, Gas and Other Fuel (Materials for maintenance/reconstruction and LP gas), Furnishing, Household Equipment and Routine Household Maintenance, and Miscellaneous Goods and Services (Car insurance and soap) sub- categories during the month.

Meanwhile, annual average inflation rose to 16.3 per cent in May 2022 from 13.0 per cent in April 2022. The core inflation (Y-o-Y), which reflects the underlying inflation in the economy increased to 37.7 per cent in May 2022 from 27.9 per cen in April 2022, while annual average core inflation increased to 13 per cent in May 2022 from 10.2 per cent in April 2022.