SL food inflation rises to 93.7% in August pushing people into starvation

The August 2022 inflation rate in Sri Lanka jumped to a record high of 64.% in July of 2022, as a political crisis, state of emergency, and weak currency added further pressure on prices. Biggest upward contribution came from food cost which jumped at an all-time high of 93.7%, namely food commodities (29.5%).

Sri Lanka’s consumer prices continued their record ascent in August on a persistent shortage of essentials from food to fuel due to the country’s depleted foreign exchange reserves.

While the Central Bank left borrowing costs unchanged in August , policy makers may be forced to resume tightening to arrest runaway inflation.

Headline inflation, as measured by the year-on-year (YoY) change in the Colombo Consumer Price Index (CCPI, 2013=100)1 increased to 64.3% in August 2022 from 60.8% in July 2022.

This increase in YoY inflation was mainly driven by the monthly increases of both Food and Non-Food categories.

Food inflation (YoY) increased to 93.7% in August 2022 from 90.9% in July 2022, while Non-Food inflation (YoY) increased to 50.2% in August 2022 from 46.5% in July 2022.

Monthly change of CCPI recorded at 2.45% in August 2022 due to price increases observed in items of both Food and Non-Food categories which were 0.83% and 1.62%, respectively.

Within the Food category, increases were observed in prices of fresh fish, fruits, bread, biscuits, eggs and chicken.

However, prices of rice and dhal decreased during the month. Further, within the Non-Food category, increases were observed in prices of Housing, Water, Electricity, Gas and Other Fuels (Electricity bill and maintenance/reconstruction),

Prices of Transport (Transport fare for schooling and airfare), Clothing and Footwear and Miscellaneous Goods and Services sub-categories increased in unbearable proportions for the people during the month.

Annual average inflation rose to 28.0% in August 2022 from 23.1% in July 2022. Core inflation (YoY), which reflects the underlying inflation in the economy, increased to 46.6% in August 2022 from 44.3% in July 2022, while annual average core inflation increased to 20.3% in August 2022 from 16.7% in July 2022.