National inflation decelerates to 4.6% on base effect

• Core inflation increases to 4.7% from 4.5% in Nov.

Sri Lanka’s countrywide headline inflation as measured by the year-on-year (YoY) change in the National Consumer Price Index (NCPI) decreased to 4.6 percent in December 2020 from 5.2 percent in November 2020. 

This was due to the statistical effect of the high base that prevailed in December 2019, Central Bank said. Meanwhile, YoY food inflation decreased to 7.5 percent in December 2020 from 9.4 percent in November 2020, whereas non-food inflation increased to 2.2 percent in December 2020 from 1.7 percent in November 2020. 

The change in the NCPI measured on an annual average basis decreased marginally to 6.2 percent in December 2020 from 6.3 percent in November 2020. 

Monthly change of NCPI was recorded at 1.03 percent in December 2020 mainly due to increases observed in prices of items in Food category. 

Moreover, monthly changes of food and nonfood categories were recorded at 1.02 percent and 0.01 percent respectively in December 2020. 

Accordingly, within the food category, increases were observed mainly in coconut, vegetables, potato, rice and red onion prices during December 2020. 

Further, YoY core inflation increased to 4.7 percent in December 2020 from 4.5 percent in November 2020, while annual average core inflation decreased marginally to 4.1 percent in December 2020 from 4.2 percent in November 2020.