Leap in inflation to 5.8%

Sri Lanka’s inflation increased to 5.8% in September from 5.0% in August 2010 making the highest leap in inflation for the year according to Department of Census and Statistics.

The Consumers’ Price index recorded 220.7 points in September where the average annual inflation increased to 5.0% comparative to 4.5% in the previous month.

The increase in inflation was mainly driven by the hike in prices of food and beverage items which contributes 45.5% of the total basket’s weight. Even though price of rice and other vegetables decreased due to the harvesting season of Yala, fish prices increased on the back of unfavourable weather conditions in the coastal area. During the month all items of food and non-food group increased by 1.0% where food items accounted for 84% of the increase. Further under the non food category the prices of gas which has a significant impact on the basket rose by 7%. (Source: Asia Securities Research)