Headline Inflation based on CCPI sees surge in Nov 2023

Colombo (LNW): In November 2023, headline inflation, measured by the year-on-year change in the Colombo Consumer Price Index (CCPI, 2021=100), rose to 3.4%, marking a notable increase from October’s 1.5%.

This uptick aligns closely with the Central Bank of Sri Lanka’s (CBSL) November 2023 projections.

The Food deflation (Y-o-Y) extended for the fifth consecutive month, registering 3.6% in November 2023 compared to 5.2% in October 2023. Concurrently, Non-Food inflation (Y-o-Y) saw an uptick to 6.8% in November 2023, up from 4.9% in October 2023.

The monthly change in CCPI for November 2023 stood at 1.06%, attributed to price increases in both Food (0.12%) and Non-Food (0.95%) categories.

However, core inflation (Y-o-Y), reflecting the underlying inflation in the economy, decreased to 0.8% in November 2023 from 1.2% in October 2023.

The outlook suggests that inflation is expected to stabilise around the targeted level of 5% over the medium term, supported by appropriate policy measures and well-anchored inflation expectations.

However, the short-term horizon may witness a transitory increase in inflation due to anticipated tax hikes, potential second-round impacts, and potential upward adjustments to administratively determined prices.