The Central Bank has confirmed a decelerated inflation in August 2008, as measured by the Colombo Consumers’ Prince Index (CCPI). The rate of inflation has dropped form 26.6 percent in July 2008 to 24.9 per cent in August.

The monthly index has also indicated a reversal of the trend with a marginal drop from 206.4 in July 2008 to 206.3 in August 2008. However the average rate has moved form 21.9 per cent to 22.0 percent, due to the cumulative effect of the increases in the preceding 12 months period.

Inflation is expected to continue to abate due to the tight monetary policy of the Central Bank as well as a drop in informational comradely prices including oil and the onset of the harvesting reasons which will result in more local food supplies in the market.

Care inflation which is measured by this demand of non-food and non-energy items of the CCPI basket rose by 0.4 percent in August, recording an annual average of 10.1 per cent and a point to point change of 17.4 percent compared to 9.3 percent and 17.2 percent in July 2008.

This marginal increase has been caused by increases in the sub categories of furnishing household equipment and routine household maintenance (0.7 per cent) and clothing and footwear (0.6 percent) the Bank added.