Sri Lanka’s Inflation Declines Significantly In November 2013

Sri Lanka’s inflation, as measured by the change in the Colombo Consumers’ Price Index, declined significantly to 5.6 percent in November 2013 from previous month’s 6.7 percent in on a year-on-year basis, the Central Bank reported on Friday.

The inflation reached the lowest level recorded since April 2012, according to the Central Bank figures.

Annual average inflation moderated to 7.3 percent in November 2013 from 7.6 percent in the previous month, declining for the sixth consecutive month.

The Central Bank attributed the sharp deceleration of inflation in November to moderation in prices of both food and non-food categories.

Consumer prices increased marginally by 0.2 percent in the month and on absolute terms the CCPI index computed by the Department of Census and Statistics based on consumer prices increased to 176.5 from to176.1 in October 2013.

Meanwhile, reflecting well contained demand pressures on prices, core inflation continued to decelerate to 2.4 percent, year-on-year in November 2013, recording a new low since its introduction in 2007, the Central Bank said in a statement.

The Central Bank says the continued low level of core inflation is a result of prudent monetary management by the monetary authority, which supports favorable inflation expectations enabling the economy to avoid the emergence of wage-price spirals.

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