Sri Lanka's annual inflation rate eased to 7.0 percent in August, a seven-month low and below forecasts, due to slowing global prices of commodities such as oil and expanding vegetable supply, officials said on Tuesday. Inflation moderated from 7.5 percent in July, according to a new consumer price index introduced in June, and was below forecasts it would stay at 7.5 percent, government data showed.
"It's because of moderating prices, especially global commodity prices like oil, coming down," said Samantha Amerasinghe, an economist at Standard Chartered Bank in Colombo. Vegetable prices dipped 0.34 percent in August from July. Vegetable supply has improved after being affected by flooding in January and February, which the government estimated caused at least $500 million in damage.
Average annual inflation, measured by a 12-month moving average, accelerated to 7.1 percent this month, its highest since the new index was launched, from 7.0 percent in July. A Reuters poll had forecast the annual average would hit 7.2 percent. Core annual inflation, which excludes fresh foods, energy, transport, rice and coconut prices, eased to 7.8 percent from a seven-month high of 8.9 percent a month ago.