Sri Lanka’s headline inflation, as measured by the change in the Colombo Consumer Price Index (CCPI), has further decreased to 6.3% in July, compared to the previous month. The CCPI-based inflation was calculated as 12.0% for the month of June 2023.According to the latest report issued by the Department of Census - Statistics (DCS), the inflation of Food Group dropped to -1.4% in July from 4.1% in June 2023.The CCPI for all items for the month of July 2023 was 190.2 and it records a decrease of 2.1 index points that is -1.12 percentage change compared to the month of June 2023 on an expenditure value basis for which the index was 192.3. This represents a decrease of expenditure value by Rs 1973.38 in the “Market Basket”.The overall rate of inflation as measured by the CCPI on Y-on-Y basis is 6.396 in July 2023 and Y-on-Y inflation calculated for the month of June 2023 was 12.0%. The Y-on-Y inflation of Food Group decreased to -1.4% in July 2023 from 4.1% in June 2023 and the Y-on-Y inflation of Non Food Group decreased to 10.5% in July 2023 from 16.2% in June 2023.The CCPI is an economic indicator constructed to measure inflation which is defined as percentage change in CCPI over the year.

There are two measures of inflation in general use.

One measure is Year on Year base or Point to Point inflation (The percentage change in the CPI during the last 12 months).

The other measure is Moving Average Inflation (The percentage difference between the average Price Index of last 12 months - the average Price Index of previous 12 months).