Inflation moderates in July
Inflation, moderated further to 4.7 percent in July 2014 from 4.9
percent in June 2014, on an annual average basis, declining for the
fourteenth consecutive month, a Department of Census and Statistics
Year-on-year (YoY) inflation has been maintained within benign single
digit levels so far in 2014, although it increased to 3.6 percent in
July 2014 from 2.8 percent a month earlier, as a result of price
increase of food items. Overall, stable prices of items in the non-food
category helped to contain inflation at a low level in July 2014. Within
this category, prices of items in the sub group of housing, water,
electricity, gas and other fuels declined while that of miscellaneous
goods and services increased.
Prices in all the other sub groups, such as clothing and footwear;
furnishing, household equipment and routine household maintenance;
health; transport; communication; recreation and culture; and education
remained unchanged during July 2014, compared to the previous month.
The increase in prices of items in the food and non-alcoholic
beverages sub-category was the main contributor to the monthly increase
(1.0 percent) in the CCPI (Colombo Consumers Price Index).
Within the Food category, drought conditions that prevailed in major
producing areas caused average prices of many varieties of vegetables to
Due to seasonal factors, prices of many fresh fish and dry fish
varieties, eggs, big onions and green chilies also increased.
Nevertheless, prices of several varieties of fruits declined. Core
inflation, which is responsive to changes in aggregate demand, increased
slightly in July 2014 compared to the previous month.
Accordingly, core inflation, on a YoY and annual average basis,
increased to 3.7 percent and 3.1 percent in July 2014 from 3.5 percent
and 3.0 percent in June 2014.