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The declining trend of consumer price inflation country-wide from the beginning of this year would continue till the end of this year, the Central Bank of Sri Lanka (CBSL) said yesterday.

The seasonal drop in prices of agriculture commodities and the general improvement in supply conditions of key consumer items have been cited as the main contributory factors to this declining trend.

A CBSL press release said the Colombo based and regional consumer price indices, including the Sri Lanka Consumer Price Index (SLCPI) introduced by the Department of Census and Statistics (DCS) on a trial basis indicated a fall in the overall prices in July over June.

"Such overall price decreases ranged from 0.1 to 1.0 per cent across the available measures of inflation, while the price decline in the food sub-indices, which represent more than 60 per cent of the total weight across all consumer price indices, ranged from 0.3 to 2.2 per cent.

Recent developments in and short-term expectations for the production sector signal a possible continuation of this falling trend of price inflation. The improved security situation following the cease-fire has helped production and improved distribution of key consumer items.

Following revisions in administered prices with the removal of the subsidy on wheat prices and the move to a pricing formula for petroleum products to reflect their cost, further drastic administered price revisions significant in the recent past are unlikely.

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