Inflation up in October

Inflation, as measured by the Colombo Consumers' Price Index (CCPI) (2002=100), computed by the Department of Census and Statistics, increased to 6.6 percent in October 2010, on a point-to-point basis as anticipated, from 5.8 percent in September.

Annual average inflation increased to 5.4 percent in October from 5.0 percent in the previous month, as a result of price developments in the preceding twelve-month period. Core inflation, which measures the price movement of non-food and non-energy items of the CCPI basket decreased marginally on a point-to-point basis, to 5.6 percent in October from 5.7 percent in the previous month. On an annual average basis, core inflation stabilized at 6.3 percent for the fifth consecutive month.

The contribution to the monthly increase of 1.2 percent in the Index originated mainly from price increases in the sub category of food and non-alcoholic beverages (2.2 percent). Within the food sub category price increases were registered for rice, wheat flour, bread, vegetables, coconut, coconut oil, big onions, red onions and meals bought from outside. Price increases of rice, coconut and vegetables were mainly due to seasonal factors.

Prices of fish and fresh fruit declined. Prices in the sub categories of Clothing and footwear (0.4 percent); and Housing, water, electricity, gas and other fuels (0.1 percent) also increased.

Marginal increases were also observed in the sub categories of furnishing, household equipment and routine household maintenance; and health.

Prices in the sub categories of recreation and culture; transport; communication; and education remained unchanged during the month.