Inflation increases in October 2010

Central Bank last week said inflation, as measured by the Colombo Consumers’ Price Index (CCPI) (2002=100), computed by the Department of Census and Statistics, increased to 6.6 per cent in October 2010, on a point-to-point basis as anticipated, from 5.8 per cent in September.

Meanwhile, the annual average inflation increased to 5.4 per cent in October from 5.0 per cent in the previous month, as a result of the price developments in the preceding twelve month period. The core inflation, which measures the price movement of non-food and non-energy items of the CCPI basket decreased marginally on a point-to-point basis, to 5.6 per cent in October 2010 from 5.7 per cent in the previous month. On an annual average basis core inflation stabilized at 6.3 per cent for the fifth consecutive month.

Central Bank said the contribution to the monthly increase of 1.2 per cent in the Index originated mainly from price increases in the sub category of Food and non-alcoholic beverages (2.2 per cent). Within the Food sub category price increases were registered for  rice, wheat flour, bread, vegetables, coconut, coconut oil,  big onions ,red onions and meals bought from outside.

Price increases of rice, coconut and vegetables were mainly due to seasonal factors. Meanwhile, prices of fish and fresh fruit declined. Prices in the sub categories of Clothing and footwear (0.4 per cent); and Housing, water, electricity, gas and other fuels (0.1 per cent) also increased.

Marginal increases were also observed in the sub categories of Furnishing, household equipment and routine household maintenance; and Health. Prices in the sub categories of Recreation and culture; Transport; Communication; and Education remained unchanged during the month.