Inflation fell last month

Inflation (year- on-year), as measured by the Colombo Consumers’ Price Index (CCPI, fell significantly to 3.8 % last month from 4.9 % in the previous month (December 2011).

The annual average inflation also decreased to 6.5 % in January from 6.7 % in December. In addition, the core inflation, which is computed by excluding the items of fresh food, energy, transport, rice and coconut from the CCPI basket, continued to decline for the fourth consecutive month to 6.7 % on an annual average basis in January 2012, according to a Central Bank press release.

However YOY core inflation remained unchanged at 4.7 % in January.

The general price level as indicated by the monthly index recorded an increase of 0.3 % in January over the previous month, with the CCPI increasing in absolute terms to 154.8 from 154.4. The contribution to the monthly in- crease in the index came mainly from price increases in the nonfood category. Accordingly, prices in the sub categories of transport (2.0 %); housing, water, electricity, gas and other fuels (0.3 %; furnishing, household equipment and routine household maintenance (1.1 %); health (0.5 %); clothing and footwear (0.5 %); recreation and culture (0.4 %); miscellaneous goods and services (0.2%); and education (0.1%) increased compared to the previous month.