Sri Lanka’s January inflation at near record high

Sri Lanka’s January inflation at near record high
Updated 01 February 2013
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Sri Lanka’s January inflation at near record high

Sri Lanka’s January inflation at near record high

COLOMBO: Sri Lanka’s year-on-year inflation rate in January accelerated to a near record high due to a spike in vegetable prices after floods but the central bank said inflation would start to ease after March, government data showed.
Annual inflation in January hit 9.8 percent, its highest since January 2009 when it hit a record high of 10.4 percent year-on-year under a new index.
It gained from 9.2 percent in December, data released by the Department of Census and Statistics showed.
“This increase is temporary. It is largely due to the increase in vegetable prices due to floods,” Swarna Gunarathne, the central bank’s chief economist, said.
Vegetable prices shot up in January following flash floods in December in the island nation’s major cultivation areas.
Gunarathne said annual inflation would remain about 9 percent until the end of the first quarter due to the high food prices.
The central bank kept policy rates unchanged on Jan. 17, saying it expected inflation to moderate soon.
Gunarathne said easing supply shocks and an improved harvest would bring inflation down to the 7 percent range.
“So there won’t be any immediate changes to rates,” he said.
Annual average inflation, measured on a 12-month moving average, rose to a record high of 8.1 percent, from 7.6 percent in December.