Inflation hits highest peak of 33.80%

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Nationwide inflation hit its highest peak of 33.80 per cent last month (April 2022), breaking a near 42-year record, Census and Statistics Department (CSD) data released yesterday showed. The previous record was 32.50 per cent established in August 1980.

‘August 1980 inflation’ was led by expenditure incurred in relation to the multibillion-rupee Accelerated Mahaweli Development Project, while current inflation is led by sky-high food inflation, driven by a previous Government policy of banning chemical fertiliser for seven months, from April 2021 to November 2021, which has scarred harvests, led by the Maha 2021/22 rice harvests, coupled with US dollar scarcity which has all but grinded food transport to a halt.

Subsequently, food inflation hit a record high 45.1 per cent last month, beating its previous record of 32.1 per cent established nearly 14 years ago in August 2008, where, globally, that was on the eve of the Global Financial Crisis and the Great Recession which came to a head a month later in September 2008 with the collapse of the US-based financial services company Lehman Brothers and locally, the Government’s war with the LTTE which had reached a crucial point.

Meanwhile, non-food inflation too broke a near 14-year record, accelerating to 23.9 per cent last month, beating its previous record of 16.8 per cent established in November 2008.

By Paneetha Ameresekere