Consumer prices soar; highest in South Asia

As Sri Lanka has been making international headlines often for the wrong reasons in recent months, the country's inflation increased to a record high for the South Asian region -- even above Pakistan which saw a sharp increase in its inflation (13%) even after deciding to go for an IMF bailout.

Consumer prices rose in Sri Lanka by 14.2% in January from a year earlier, faster than the median estimate of 13.2% in a survey conducted by Bloomberg. The average annual inflation rate rose to 6.9%.

The Colombo Stock Exchange which was on the record high upward trend also witnessed sharp losses and less market activity this week.

A stock broker expressed alarm that the inflation rate might go even higher in the coming months due to the continuing economic crisis. He made a point; "Since our Central Bank Governor is of the view that pumping more newly printed money into the market does not cause more inflation, there is little hope for us."