Bath Curry Indicator trending down

Saturday, 12 November 2022 00:19 - - {{hitsCtrl.values.hits}}

Advocata Institute’s Bath Curry Indicator (BCI), which tracks changes in the retail price of food in Colombo that typically goes into a packet of rice, recorded a year on year increase of 53% in October 2022.

Compared to June 2022, prices of the BCI basket of food have been declining. The average price of green chillies, tomatoes, dhal and beans fell over the past four months, contributing to the reduction of the overall BCI. Supermarket prices tracked by the BCI also show a similar trend.

Official year on year food inflation stood at 85.6% in October 2022 based on the Colombo Consumer Price Index. A decline of 2% compared to September 2022.

Food inflation in Sri Lanka over the past 24 months has increased at an unprecedented rate. Whilst external factors like the pandemic and the Russian-Ukrainian war have caused supply chain issues that have resulted in global price levels rising.

In Sri Lanka, the price increases are mainly a result of years of poor monetary, fiscal and trade policy. A depreciated currency, ban on fertiliser and import bans in general due to low foreign reserves have exacerbated price increases.

Continued decline in prices will depend on future macroeconomic policies made to bring down inflation as well as policies to improve agriculture productivity.