National Inflation in March at 7%, down from 8.1% previous month due to COVID-19

COLOMBO (News1st): National Headline inflation in March rose to 7.0 percent, slowing down from 8.1 per cent in February 2020 due to the falling food prices amid the COVID-19 outbreak, the Central Bank said. Sri Lanka reported 321 COVID-19 cases as of Wednesday, with 199 active patients under medical supervision. The inflation slowdown was driven by the monthly decrease in the prices of food items. Accordingly, food inflation (Y-o-Y) declined to 14.1 percent in March 2020 from 16.3 percent in February 2020 while non-food inflation (Y-o-Y) recorded at 1.8 percent in March 2020. The change in the NCPI measured on an annual average basis increased to 4.9 percent in March 2020 from 4.5 per cent in February 2020.Monthly change of NCPI recorded at negative 1.3 percent in March 2020 due to declines observed in prices of items in the Food category, driven by the seasonal supply of food crops and timely intervention of the government to reduce prices of certain food items amid COVID-19 outbreak. Accordingly, within the Food category, prices of vegetables, red onions, rice and dhal recorded decreases in March 2020. However, within the Non-Food category, prices of the items in Alcoholic Beverages and Tobacco (beetle leaves); and Health (payments to medical tests) sub-categories recorded increases. With lockdown measures in place, supermarkets, retail shops, the manning market and economic centres across the island remain closed, disrupting the supply chain across the country. Continuing its decreasing trend for the fifth consecutive month, the year on year core inflation, which excludes fresh food, energy, transport, rice and coconuts, decreased further to 3.2 percent in March 2020 from 3.4 percent in February 2020. Meanwhile, annual average core inflation decreased to 5.2 percent in March 2020 from 5.5 percent in February 2020.