Inflation drops in Nov.
The rate of inflation, as measured by the year-on-year change in the
Colombo Consumers’ Price Index (CCPI) (2002=100), decelerated further to
16.3 per cent in November, 2008 for the fifth consecutive month.
The annual average inflation rate also decelerated to 23.0 per cent
for the first time in 26 months since September, 2006.
The core inflation, which measures the price movement of non-food and
non-energy items of the CCPI basket, stabilized at the previous month’s
level of 18.1 per cent, on a point-to-point basis.
The rate of headline inflation decreased significantly in November,
2008 from 20.2 per cent recorded in October, 2008 having continuously
decelerated from the peak of 28.2 per cent in June, 2008, due to the
declines in Transport prices (3.1 per cent) and Housing, water,
electricity, gas and other fuel prices (1.9 per cent). The core
inflation, on a point-to-point basis, remained unchanged at the previous
month’s rate of 18.1 per cent although the annual average rate rose from
12.1 per cent to 13.0 per cent. Monthly core index rose marginally by
0.2 per cent due to the combined impact of the price increases in
Furnishing, household equipment and routine household maintenance (1.8
per cent), Health (0.7 per cent), Education (0.6 per cent), Non
alcoholic beverages (0.5 per cent), Clothing and footwear (0.4 per
cent), and Miscellaneous goods and services (0.4 per cent).
The pressure on the price level emanating from the international
commodity prices has further moderated in November.
Further dampening of international prices may lessen the external
price pressure on domestic prices in the forthcoming months as well.
The moderation in demand pressure on prices following the tight
monetary policy stance adopted in the past is also evidenced from the
steady deceleration in monetary aggregates.