National prices ease in April to 33.6% on higher base effects

• Actual prices still remain largely elevated putting a damper on consumption and production activities 

The national consumer prices fell sharply in the 12 months to April, mainly due to the higher base effects last year followed by the improvement in the supply conditions and the decline in commodity prices led by global energy. 
Inflation measured by the National Consumer Price Index rose 33.6 percent in April 2023 from a year ago, decelerating from 49.2 percent through March 2023. 
Consumer prices in Colombo also eased sharply to 35.3 percent in April, from 50.3 percent in March.
The Central Bank expects the headline inflation to return to single-digit levels by the year end. Its preferred inflation band is between 4 to 6 percent. 
April national inflation is also the lowest in 14 months when the consumer prices rose at 21.5 percent in March, last year. 
After that, the prices started galloping towards hyperinflationary levels before peaking at 73.7 percent in September, due to a combination of factors led by the free fall of the rupee against the dollar by about 80 percent. 
The national food prices in April eased significantly to 27.1 percent from a year ago, sharply coming down from 42.3 percent in March. 
The monthly prices however showed a 0.3 percent from March, compared to a 2.1 percent decline in the previous month. 

Non-food inflation, which remained relatively sticky, too declined sharply, due to the notable downward revisions in the energy and cooking gas prices. 
Non-food inflation rose by 39.0 percent in the 12 months to April, from 54.9 percent in March while the monthly prices too declined 2.0 percent, compared to 2.3 percent increase seen between February and March. 
Meanwhile, the so-called core inflation, which is measured barring often-volatile food, energy and transport categories, rose by 31.8 percent in the 12 months to April, easing from 44.2 percent in March. 
Despite benign inflation reports, largely due higher base effects, the prices of goods and services continue to remain sharply elevated.
While the appreciation in the rupee against the dollar has boded positively, it appears that the full benefit of it is not being passed down to the end consumer. About 70 percent of Sri Lanka’s consumer goods are imported.