Sri Lanka concluded the year 2023 with a 4.0 percent rise in consumer prices over the 12 months leading to December, as reported by the prominent Colomb Consumer Price Index. The latest figures indicate a 0.9 percent increase in prices during the final month of the year.
This modest inflation comes on the heels of the central bank's inflationary policy, which ceased in September 2022, resulting in a surplus in the balance of payments. Since then, prices have seen a cumulative rise of 3.0 percent. The Consumer Price Index, re-based, expanded from 189.3 points to 195.1 points by the end of December.
The relatively lower price hikes can be attributed to currency appreciation observed in March. Despite this, sectors like education and housing experienced continued upward trends. Notably, market interest rates and deflationary open market operations, akin to those observed in Singapore, played a role in influencing these dynamics.
Currency appreciation, necessitating deflationary open market operations, contributed to stabilizing traded goods prices, including food and energy. This measure countered the persistent increases in services such as education and housing, which had adjusted to the currency collapse experienced in 2022.
