Family’s monthly expenditure rises by record Rs 5,673 in April

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Islandwide inflation broke all records last month, beginning with its monthly index change registering a record Month-on-Month (MoM) increase of 10.2 per cent or Rs 5,672.59 to last month, Census and Statistics Department (CSD) data released on Monday (23 May) showed.

This 10.2 per cent (Rs 5,672.59) monthly increase to last month reflects an increase in a family’s monthly expenditure basket.

Consequently, nationwide inflation hit its highest peak of 33.80 per cent last month (April 2022), breaking a near 42-year record, where the previous highest record of 32.50 per cent was established in August 1980.

Subsequently, food inflation hit a record high of 45.1 per cent last month, beating its previous record of 32.1 per cent established nearly 14 years ago in August 2008 and 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.

“Monthly change of islandwide inflation recorded an increase of 10.22 per cent (10.2 per cent) in April 2022 due to price increases observed in items of both food and non-food categories which were a record 6.03 per cent and 4.19 per cent,” said CSD.

Accordingly, within the food category, increases were observed in prices of rice, milk powder, dhal, sugar, and bread. Further, prices of items in the non-food category recorded increases mainly due to price increases observed in the transport (petrol, bus fare and diesel), housing, water, electricity, gas and other fuel (materials for maintenance, housing rent and LP gas), health (fees to private medical practices), education (tuition fees), and restaurant and hotels sub-categories during the month (April), CSD said.

Meanwhile, ‘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 have scarred harvests, led by the Maha 2021/22 rice harvest, 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