Inflation accelerates in December to 4.2%

• Driven by price increases of both food and non-food items
• Food inflation decreases to 9.2% while non-food inflation increases to 2%
• Core inflation increases to 3.5% from 3% in November

Headline inflation, as measured by the year-on-year (YoY) change in the Colombo Consumer Price Index (CCPI) increased marginally to 4.2 percent in December 2020 from 4.1 percent in November 2020. 

This was driven by monthly price increases in both food and non-food categories. Meanwhile, food inflation (YoY) decreased to 9.2 percent in December 2020 from 10.3 percent in November 2020. 

However, non-food inflation (YoY) increased to 2.0 percent in December 2020 from 1.6 percent in November 2020. The change in the CCPI measured on an annual average basis remained unchanged at 4.6 percent in December 2020 for the third consecutive month. 

Monthly change of CCPI was recorded at 0.66 percent in December 2020. This was due to price increases observed in items of both food and non-food categories. 

Moreover, monthly changes of food and non-food categories were recorded at 0.45 percent and 0.22 percent respectively in December 2020. Accordingly, within the food category, prices of coconut, vegetables and rice increased in December 2020. Meanwhile, prices of items in the non-food category recorded an increase during the month mainly due to price increases observed in the transport (bus fare) and health (private medical doctor fee) 
sub-categories. 

The core inflation (YoY), which reflects the underlying inflation in the economy, increased to 3.5 percent in December 2020 from 3.0 percent in November 2020. 

However, annual average core inflation declined marginally to 3.1 percent in December 2020 from 3.2 percent in November 2020.