Sri Lanka private inflation index surges to 9.9-pct in July

An official index compiled by state statistics office showed prices falling in absolute terms in August while the annual increase edged up to 6.

The index by private citizens is based on straightforward statistical methods and is more volatile.

Most official indices almost all countries contain statistical techniques to smoothen volatility and sometimes understate inflation, including dropping volatile items (food and energy) and ignoring changes above a certain threshold rise.

Reducing traded items in the basket, which respond quicker to monetary policy and increasing the share of non-traded items can also reduce the volatility of an index.