SL’s headline inflation slows to lowest since 2016  

Sri Lanka’s headline inflation slowed to 0.9 per cent in September, the lowest since January 2016, from 2.5 per cent in August 2018 on a year-on-year basis, Central Bank announced today (Tuesday).
 
The decline in the food category particularly that of vegetables, coconuts, green chillies and fresh fish prices have contributed in the significant deceleration in headline inflation, official data showed.    
 
But the consumers are worried and they wonder how to cope up with the cost of living as their buying power has not changed.
 
Even though the prices of food items have decreased people are unable to cope with their expenses, a spokesman for the National Movement for Consumer Rights Protection said.   
 
Sri Lanka’s headline inflation was measured by the change in the National Consumer Price Index (NCPI, 2013=100) and compiled by the Department of Census and Statistics (DCS).
 
The deceleration in year-on-year inflation in September was driven by both the base effect and the monthly decline in Food prices.
 
The change in the NCPI measured on an annual average basis decreased from 4.7 per cent in August 2018 to 4.0 per cent in September 2018.
 
When the monthly change is considered, the NCPI decreased from 125.4 index points in August 2018 to 124.4 index points in September 2018 due to decline in prices of the items in the Food category, particularly that of vegetables, coconuts, green chillies and fresh fish.
 
Meanwhile, price increases were observed in the Non-food category, particularly that of Alcoholic Beverages and Tobacco; Transport and Restaurants and Hotels sub-categories.
 
The NCPI Core inflation, which reflects the underlying inflation in the economy, increased to 3.1 per cent in September 2018 from 2.7 per cent in August 2018 on year-on-year basis.
 
Meanwhile, annual average NCPI Core inflation declined to 2.4 per cent in September 2018 from 2.5 per cent in August 2018. (Bandula)