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Statistics Department said the monthly decline in Food prices in March this year supported by the favourable supply conditions attributed to this sharp decline in year-on-year inflation. Headline Inflation continued to follow the declining trend exhibited since November 2017. The change in the NCPI measured on an annual average basis decreased from 7.2 percent in February 2018 to 6.7 percent in March 2018. When monthly change is considered, the NCPI declined from 123.7 index points in February to 122.8 index points in March mainly due to the decline in food prices. The NCPI Core inflation, which reflects the underlying inflation in the economy, also continued its declining trend observed since September 2017 and decreased to 1.9 percent in March from 2.0 percent in February. The IMF Staff mission recently projected that Sri Lanka's inflation will remain below 5 percent in 2018 but added that Central Bank should continue to remain vigilant in guarding against inflationary pressures. Due to a weather-related spike in food prices, inflation exceeded the upper limit for the inner band for December, but has since fallen back within the inner band, the IMF Staff mission further said.
