Monthly national consumer prices slow to 0.9%

• January 2025 marks the fifth consecutive month of price declines which set off in September last year
• Monthly food prices in January 2025 rose by 1.0 percent, slowing from the 2.6 percent in December 2024
• Non-food prices rose by 0.8 percent in January 2025 from a month ago, flipping from 0.8 percent decline in December 2024.
• Average 20 percent cut to power tariffs helped to keep the monthly non-food prices in check, but was offset by the rise in house rent, expenses on education and transportation

Sri Lanka’s national monthly consumer prices slowed to 0.9 percent in January 2025 from the 1.1 percent increase in December 2024 on the back of increases in both food and non-food prices during January 2025.

However, measured annually, the price fell 4.0 percent from 2.0 percent decline in December 2024, deepening the deflation and also extending the current stretch of negative prices to its fifth consecutive month.

This appears to have been due to people slowing down their spending after the end of the year-end festive season which put less pressure on food staples while the substantial cut to the electricity tariffs from the third week in January also helped keep the other prices under check.

However, the prices were down 4.0 percent in the twelve months to January 2025, much deeper than the 2.0 percent decline seen through December last year.

January 2025 marked the fifth consecutive month of price declines which set off in September last year in response to the monthly cuts to fuel prices and the twice cut electricity tariffs during the period.

The Central Bank repeatedly claimed the current stretch of deflation – continuous decline in consumer prices in a given basket of goods – would continue through the first quarter of 2025 before turning positive thereafter.

The biannual Monetary Policy Report released by the Central Bank recently said inflation will top their 5.0 percent medium term target between the final quarter of this year and the first quarter of 2026 before peaking around 2.0 percentage points above their target levels in the second quarter in 2026.

Meanwhile, the monthly food prices in January 2025 rose by 1.0 percent, slowing from the 2.6 percent in December 2024 as prices of many food staples such as lime, big onion, chicken, eggs, sugar and the likes saw declines.

But, the prices of rice, which became a persistent problem for the government, continued to rise through January and so are the prices of vegetables, fresh fish, coconut and coconut oil.

Coconut prices rose the most in the food basket in January and are slowly going out of reach of the common man.

The annual food prices declined 2.5 percent, faster than the 1.0 percent decline seen through December 2024, as prices measured on an annual basis are still lower than where they were a year ago.

Sri Lanka is coming off over 70 percent increase in the official price indices in 2022 which broadly continued through most of the first half of 2023.

The non-food prices rose by 0.8 percent in January 2025 from a month ago, flipping from a 0.8 percent decline in December 2024. However, the annual prices fell 5.2 percent in the twelve months through January 2025, faster than the 2.9 percent decline in such prices through December 2024.

The average 20 percent cut to the power tariffs helped to keep the monthly non-food prices in check but was offset by the rise in house rent, expenses on education and transportation which caused due to the increase in the sub-index, cost of servicing of vehicles.

Source: Daily Mirror