December inflation slows down to 2.8% over base effect

Sri Lanka’s inflation in December as measured by the Colombo Consumer Price Index (CCPI) slowed to 2.8 percent from 3.1 percent in November, the Census and Statistics Department said yesterday.

As seen in October as well as in November, headline inflation in December was also affected by a lower base seen in December 2014, due to pass-through effects from the electricity tariffs reduction and downward revisions in fuel prices in October 2014.

However core inflation returned to its upward trend recording a 4.5 percent year-on-year growth from 4.3 percent in November. The moving average inflation rate for the month of December 2015 was flat at 0.9 percent.

Consumer prices rose 0.3 percent in December, with the CCPI increasing to 185.7 from 184.7 points.

The year-on-year food inflation slowed to 4.2 percent in December from 5.2 percent in November.

However, non-food inflation accelerated to 1.5 percent from 1.1 percent in November.

For the month of December 2015, on year to year basis, contribution to inflation by food commodities was 1.99 percent.

Contribution of non-food items was 0.77 percent. This was mainly due to value change increases in clothing and footwear (0.57 percent), health (0.79 percent) and education (0.24 percent) groups while value change decreases of housing, water, electricity, gas and other fuels and transport groups.

The amount of decrease in housing, water, electricity, gas and other fuels has been mainly due to the price decline of L.P. Gas (0.72 percent) and kerosene Oil (0.17 percent).

Also the amount of decrease in transport has been mainly due to the price decline of bus fare (0.21 percent) and petrol and diesel (0.86 percent).

The net effect of above items has led

to the increase in non-food sub index.