Inflation declines to 4.1% in August

Headline inflation as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2013=100)1 decreased to 4.1% in August 2020 from 4.2% in July 2020.

This was mainly driven by the statistical effect of the high base prevailed in August 2019.

Food inflation (Y-o-Y) increased to 12.3% in August 2020 from 10.9% in July 2020, whereas Non-food inflation (Y-o-Y) decreased to 0.8% in August 2020 from 1.5% in July 2020.

The change in the CCPI measured on an annual average basis remained unchanged at 4.8% in August 2020. Monthly change of CCPI recorded at 0.0% in August 2020.

This was due to setting-off the price increase of 0.1%  in the Food category, with the price decline observed in the Non-food category by the same magnitude. Accordingly, within the Food category prices of coconut, vegetables and turmeric increased in August 2020.

However, prices of fresh fish and limes recorded significant declines during the month. Within the Non-food category, prices of items in Health (payments to medical laboratories) sub-category declined during the month.

The core inflation (Y-o-Y), which reflects the underlying inflation in the economy, remained unchanged at 3.2% in August 2020. However, annual average core inflation declined further to 3.8% in August 2020 from 4.0% in July 2020.

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