August continues deflation run

CCPI records -0.2% y-o-y and annual average inflation dips to 1% from July

Inflation, as measured by the change in the Colombo Consumers’ Price Index (CCPI) (2006/07=100), which is compiled by the Department of Census and Statistics, remained unchanged at -0.2% in August 2015, as recorded in the previous month, on an year-on-year basis. 

Annual average inflation declined to 1.0% in August 2015 from 1.3% in July 2015, the Central Bank said in a statement.   

CCPI decreased by 0.5% from July to August 2015. 

The monthly decrease in CCPI was caused by the decline in prices of items in the Food category. Prices of some varieties of vegetables, coconuts, coconut oil, rice, green chilies, fresh fish, potatoes and red onions decreased during August 2015. 

However, prices of sprats, eggs, some varieties of fruits and big onions increased during the month. 

Within the non-food category, prices in Clothing and Footwear; Furnishing, Household Equipment and Routine Household Maintenance; Education; and Miscellaneous Goods and Services subcategories increased. Due to the full impact of the downward revision of LP Gas prices with effect from 14.07.2015, the Housing, Water, Electricity, Gas and other Fuels subcategory recorded a decline. 

All the other subcategories, namely, Health, Transport, Communication and Recreation and Culture remained unchanged during the month.

Core inflation, which reflects the underlying inflation in the economy, increased to 3.9% in August 2015, from 3.5% in July 2015 on a year-on-year basis. Annual average core inflation remained unchanged at 2.8%, for the third consecutive month.