sri lanka news: Sri Lanka’s inflation jumps to 70.2% amidst worst-ever economic crisis

Inflation in Sri Lanka rose to 70.2 percent in August from 66.7 percent a month ago as the island nation grapples with the worst of the economic crisis, according to official data released on Thursday.

The National Consumer Price Index (NCPI), which measures how much people spend on a select basket of goods and services, rose 2.5 percent in August, with grocery prices up 1.7 percent and non-cash prices up. Food rose by 3.2 percent.

Non-food inflation rose to 57.1 percent in August from 52.4 percent in July as electricity tariffs were raised sharply.

However, monthly prices fell to 3.2 percent from 6.7 percent in July.

Core prices measured, with volatile items like groceries, energy and transportation accelerating to 60.5 percent in August from 57.3 percent in July.

According to official data, food prices rose 84.6 percent, compared with 82.5 percent in July, while monthly measured price changes slowed to 1.7 percent from 4.6 percent in July.

Earlier this month, the electricity tariff was revised, which combined with rising food prices, led to a rise in the national consumer price index for August.

According to tax experts, the 15 percent sales tax and 2.5 percent social security contribution could contribute to further price increases of at least 22 percent.

Based on inflation forecasts, the Reserve Bank of Sri Lanka said last month that prices could peak in September before easing thereafter if global commodity prices remain stable.

In mid-April, Sri Lanka declared its international debt service insolvent due to the currency crisis. The country has an external debt of US$51 billion, of which US$28 billion must be repaid by 2027.

According to the latest World Bank assessment, Sri Lanka ranks fifth for the highest food price inflation in the world. It ranks behind Zimbabwe, Venezuela and Turkey, while Lebanon tops the list.

The country of 22 million people has been struggling with shortages of basic necessities, including fuel, food and medicines, for months after its foreign exchange reserves fell to record lows, blocked imports and fueled unprecedented public unrest.

Anti-government protests earlier in the year forced President Gotabaya Rajapaksa to flee the country in July. He returned to Colombo earlier this month after a new government was formed under President Ranil Wickremesinghe and anti-government protests had subsided.

https://economictimes.indiatimes.com/news/international/world-news/sri-lankas-inflation-jumps-to-70-2-amidst-worst-ever-economic-crisis/articleshow/94381050.cms sri lanka news: Sri Lanka’s inflation jumps to 70.2% amidst worst-ever economic crisis

Russell Falcon

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