Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2013=100) increased to 39.1 percent in May 2022 from 29.8 percent in April 2022.
This increase in Y-o-Y inflation was driven by the monthly increases of Food and Non-Food categories.
Subsequently, Food inflation (Y-o-Y) increased to 57.4 percent in May 2022 from 46.6 percent in April 2022, while Non-Food inflation (Y-o-Y) increased to 30.6 percent in May 2022 from 22.0 percent in April 2022.
Monthly change of CCPI recorded at 8.34 percent in May 2022 due to price increases observed in items of both Non-Food and Food categories which were 4.87 percent and 3.47 percent.
Accordingly, prices of items in the Non-Food category recorded increases mainly due to price increases observed in the Transport (Petrol, diesel and bus fare), Housing, Water, Electricity, Gas and Other Fuel (LP gas and Materials for maintenance/reconstruction), Restaurant and Hotels and Miscellaneous Goods and Services (Car insurance) sub-categories. Further, within the Food category, increases were observed in prices of vegetables, fresh fish, rice, bread, dried fish and dhal during the month.
Annual average inflation rose to 14.2% in May 2022 from 11.3% in April 2022. The core inflation (Y-o-Y), which reflects the underlying inflation in the economy increased to 28.4% in May 2022 from 22.0% in April 2022, while annual average core inflation increased to 10.2% in May 2022 from 8.1% in April 2022.
However, the Monetary Board of the Central Bank is of the view that although inflation is projected to remain elevated in the near term, the substantial policy measures taken by the Board, at its meeting held last month combined with the other measures to stem the firming up of aggregated demand pressures, are expected to contain any further build-up of inflation expectations and ease inflationary pressures in the period ahead.