National inflation decelerates to 0.4% in December

Sri Lanka’s countrywide headline inflation, measured by the year-on-year change in the National Consumer Price Index (NCPI), decelerated to 0.4 percent in December 2018, from 1.0 percent a month ago, the data released by the Census and Statistics Department showed.

The decrease is driven by the decrease of prices of items in both food and non-food categories.

The year-on-year food inflation decreased to -4.5 percent in December, from -3.9 percent in November, while the year-on-year non-food inflation also decreased from 5.2 percent in November to 4.7 percent in December.

The change in the NCPI measured on an annual average basis decreased to 2.1 percent, from 2.7 percent in November 2018.

The month-on-month change of the NCPI was -0.5 percent in December 2018.

This was mainly due to the decrease in the prices of the items in the non-food category, where transport sub-category (petrol, diesel and bus fare) recorded the highest decrease.

Further, the prices of items in the communication and alcoholic beverages and tobacco sub-categories also reported decreases during the month.

At the same time, the prices of the items in the food category decreased, where vegetables, limes, big onions, banana and coconuts recorded prominent decreases.
The core inflation, which reflects the underlying inflation in the economy, remained at 3.1 percent in December, on a year-on-year basis.

Meanwhile, the annual average core inflation also remained unchanged at 2.4 percent.