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PREVIEW-Sri Lanka inflation seen at 9-mo high in May
May 30, 2012 / 10:03 AM / 6 years ago

PREVIEW-Sri Lanka inflation seen at 9-mo high in May

* Inflation rate seen at 6.5 pct vs 6.1 pct in April
    * Weak rupee, govt price hike drive inflation
    * Data expected on Thursday, May 31 at 0930 GMT

    COLOMBO, May 30 (Reuters) - Sri Lanka's annual inflation
rate may have risen to a nine-month high in May as a weakening
rupee pushed up prices of imported goods, while the government's
decision to pass higher oil price hike to consumers pushed up
fuel and electricity prices.	
    The annual inflation is expected to have risen in May to 6.5
percent, its highest since August, a Reuters poll of 13 analysts
showed. Prices rose 6.1 percent in April from a year ago, the
third straight month of speeding inflation.	
    "This month inflation will reflect trickle down effect of
the fuel price hike and impact on the rupee depreciation,"
Danushka Samarasinghe, head of research at TKS Securities told
    The rupee has depreciated 13.7 percent this year, pushing up
costs for Sri Lanka, which imports most essential food
commodities. Consumer goods accounted for 20 percent of last
year's total $20 billion import bill.	
    Early this month, the government also raised prices of LP
gas, milk powder, and cement by more than 10 percent. 	
    The central bank expects a 0.5-0.6 percent rise in May
inflation, but projects the number to stable between 7-7.5
percent this year due to decline in demand pressure after price
revisions and improved agricultural supply locally. 	
    "Therefore, adverse impacts coming from depreciation on
inflation will be mitigated for some extent," Swarna Gunaratna,
the central bank's chief economist told Reuters on Wednesday.	
    "Therefore we will be able to manage inflation at 7-7.5
percent even by the end of the year." 	
    The central bank in May kept its key policy rates unchanged
after raising twice since February to two year highs, saying the
policy measures implemented thus far are sufficient to moderate
the expansion of both credit and the trade deficit and will
curbed demand-driven inflationary pressure. 	
    The 12-month inflation moving average is expected to have
slowed to an 20-month low of 5.6 percent, from last month's 5.7
percent, with analyst estimates ranging from 5.5 to 5.6 percent.	
    Following is the poll's forecast for May inflation data due
to be released on Thursday: (Inflation figures are in percent)  
 CCPI                  Index    vs year ago    12-Mo Avg 
 Median                161.3        6.5           5.6
 Average               161.5        6.6           5.6  
 Low                   160.7        6.1           5.5  
 High                  163.0        7.6           5.6  
 April figures         159.8        6.1           5.7
 No. of contributors      13         13            13  
 (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Ramya

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