August 01, Colombo (LNW): Inflation in Colombo District increased to 2.4 per cent in July, up from June’s 1.7 per cent, as favourable base effects diminished.
Monthly prices declined by 0.5 per cent in July due to softening food prices and lower non-food prices, driven by significant cuts in power tariffs and earlier reductions in fuel prices.
The Central Bank of Sri Lanka (CBSL) expressed confidence in managing medium-term inflation risks and maintained its 5 per cent target, while cutting rates by 25 basis points, seeing room for economic growth without igniting inflationary pressures.
Despite recent lower inflation, Sri Lankan consumers remain strained from over 70 per cent inflation in 2022 and substantial tax hikes.
July saw food prices rise by 1.5 per cent year-on-year, slightly up from June’s 1.4 per cent. Monthly food price increases slowed to 0.1 per cent, from 2.8 per cent between April and May.
Price rises in staples were largely offset by declines in other staple prices.
Non-food prices, which softened July’s inflation reading, rose 2.8 per cent year-on-year, up from 1.8 per cent in June.
Notably, the non-food index dropped by 0.7 per cent, mainly due to reductions in electricity tariffs, fuel, and gas prices.
Authorities announced no further gas price revisions for August.
Core inflation, excluding volatile items like food, energy, and transport, remained steady at 4.4 per cent year-on-year in July, unchanged from June.
