CB says inflation drops further for third consecutive month in October

The Central Bank said this week inflation, as measured by the Colombo Consumers’ Price Index (CCPI) (2006/07=100), computed by the Department of Census and Statistics, decreased substantially on a year-on-year (YoY) basis to 5.1 per cent in October from 6.4 per cent in September 2011, for the third consecutive month.

The annual average inflation also decreased marginally to 7.1 per cent in October from 7.2 per cent in the previous month. Similarly, the core inflation both on the YoY and annual average bases decreased to 5.6 per cent and 7.5 per cent, respectively as compared to September 2011.

Meanwhile, the general price level as indicated by the monthly index recorded a decrease of 0.1 per cent in October 2011 over the previous month, with the Index decreasing in absolute terms to 151.5 from 151.7. The contribution to the monthly decrease in the Index came mainly from price decreases in the sub category of Food and non alcoholic beverages (0.4 per cent).

Within the Food sub category, prices of almost all varieties of fish and sea food, some varieties of vegetables, potatoes, big onions, coconut and coconut oil, garlic and sugar declined due to improvements in supply.

However, Central Bank said prices in the sub categories of Clothing and footwear (0.9 per cent); Housing, water, electricity, gas and other fuels (0.1 per cent); Furnishing, household equipment and routine household maintenance (0.2 per cent); and Miscellaneous goods and services (0.6 per cent) increased compared to the previous month.

Meanwhile, the prices in the sub categories of Health; Communication; Recreation and culture; and Education remained unchanged during the month.