COLOMBO, Aug. 3 (Xinhua) -- Sri Lanka's headline inflation, measured by the Colombo Consumer Price Index, rose to 7.3 percent year-on-year in July from 6.8 percent in June, marking the highest reading since June 2023, the Central Bank of Sri Lanka said Friday.
The increase was mainly driven by faster food inflation, the adjustment of housing rents and a base effect, according to the bank's latest inflation report.
The index, based on 2021 prices, increased by 0.24 percent month on month in July. Non-food items contributed 0.23 percentage points to the monthly rise, largely due to higher housing rents, while food items contributed 0.01 percentage points.
The overall index increased to 208.2 in July from 207.7 in June. Food inflation accelerated to 6.3 percent in July from 3.6 percent a month earlier, making the largest contribution to the increase in headline inflation. Non-food inflation, however, eased to 7.8 percent from 8.4 percent.
Core inflation, which excludes volatile items, rose to 4.4 percent year-on-year from 4 percent. Transport recorded the highest annual price increase among the main categories in July at 17.2 percent, although this was lower than the 18.7 percent recorded in June.
Inflation in restaurants and hotels increased to 10.6 percent from 10.3 percent, while education inflation rose to 7.2 percent from 6.5 percent. Prices of miscellaneous goods and services increased by 6.2 percent, compared with 5.8 percent in June.
Inflation in housing, water, electricity, gas and other fuels eased to 5.4 percent from 6.3 percent. Health inflation declined to 3 percent from 4.2 percent, while clothing and footwear inflation fell to 0.8 percent from 1.3 percent.
The central bank said projections prepared during its July monetary policy round indicated that headline inflation would remain above the 5 percent target in the near term before easing and stabilizing around the target over the medium term.
It said the outlook would be supported by appropriate policy measures but remained subject to elevated uncertainty due to tensions in the Middle East and their possible effects on global and domestic economic activity. ■
