The inflation increased to 7.8 percent in February from 6.8 percent in last month while the Colombo Consumer Price Index increased by 1.2 percent to 233.9 points from 231.2 points in January 2011.
The annual average inflation increased marginally to 6.1 percent in February from 6.0 percent in January, mostly as a result of the supply-side pressure, according to the Central Bank.
Speaking to Reuters Central Bank Governor Ajith Nivard Cabraal has said that the hike in inflation is however not worrisome although it is more than expected.
The rise inflation is mostly due to supply-side pressure that cannot be controlled and will not be a major concern to the monetary policy, Cabraal has told the Reuters news agency.
It's not a cause of concern, as it is mostly or totally due to the supply side. It's a little more than expected," Cabraal was quoted.
The Central Bank Governor has said that if the inflationary pressures rise from the supply-side the government will be advised to intervene with some measure like tariff-reduction.
However, he has expressed concerns over the rising oil prices in the world market affecting Sri Lanka's economic growth.
"We are a little concerned about the oil prices that are going up at a more than gentle rate, and it is certainly a worry for everyone," Reuters quoted the Governor.
Cabraal predicted an 8.5% GDP growth for 2011 when he presented his monetary plans road map in January for the next few years. He correctly pointed out that the challenge would be to maintain inflation at around mid-single digit levels in the short and medium term.
He said the Bank will continue to monitor monetary and economic developments closely and respond appropriately.
The Central Bank Governor expects the agricultural and fishing industry gains from the North and East to offset the inflationary pressures arising from the supply-side but according to economists the recent floods that devastated the agricultural crop in the region may put a damper on those expectations.
No comments:
Post a Comment