Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100)1 decreased to a single digit of 6.3 per cent in July 2023 from 12 per cent in June 2023.

The decline in the headline inflation is broadly in line with the disinflation path envisaged by the Central Bank of Sri Lanka (CB) in July 2023, the banking regulator said on Monday.

The Food category, after nearly four years, recorded a deflation (Y-o-Y) of 1.4 per cent in July 2023 compared to the inflation of 4.1 per cent observed in June 2023. Meanwhile, the Non-Food inflation (Y-o-Y) decreased further to 10.5 per cent in July 2023 from 16.2 per cent in June 2023.

The monthly change of the CCPI recorded at -1.12 per cent in July 2023 due to the combined effect of price decreases of -1.13 per cent observed in the items of Non-Food category and the marginal price increases of 0.01 per cent recorded in the items of Food category. The core inflation (Y-o-Y), which reflects the underlying inflation in the economy, decreased to 6.1 per cent in July 2023 from 9.8 per cent in June 2023

“Looking ahead, based on the available information, inflation is expected to moderate further and stabilise around the targeted level over the medium term. This disinflation process is supported by the lagged impact of tight monetary and fiscal policies, improvements on the supply side, the softening of energy and food inflation, and the favourable base effect,” it was stated.

(sundaytimes.lk)