The Colombo Consumer Price Index (CCPI) reflected a reduction in food inflation to 30.6% in April from 47.6% in March, while non-food inflation reached 37.6%, the Census and Statistics Department said in a statement. Sri Lanka has been struggling with soaring prices for more than a year as it grapples with the worst financial crisis since gaining independence from Britain in 1948. April's inflation was blunted by a reduction in fuel prices, lower demand and easing global commodity prices, analysts said, with inflation likely to moderate faster over the next three months.
"This decline is in line with expectations," said Sanjeewa Fernando, senior vice president of research at Asia Securities. "By June inflation is projected to decline to about 14% to 15%, partly because of the high base effect."
The central bank kept interest rates steady in early April
and expressed optimism for inflation to decelerate sharply in
the coming months, in its first policy decision since securing a
$3-billion bailout from the International Monetary Fund (IMF).
Central bank Governor Nandalal Weerasinghe said a favourable
base effect would kick in from next month, with inflation
projected to hit single digits by the end of December. The figure for national consumer price inflation, released
with a lag of 21 days every month, rose slightly to 49.2% in
March, also dropping below 50% for the first time since last
August. The CCPI, a lead indicator for broader national prices,
tracks inflation in Colombo, Sri Lanka's biggest city.
(Reporting by Uditha Jayasinghe in Colombo and Rama Venkat in
Bengaluru; Editing by Clarence Fernandez)
