Colombo June 30 2022: Sri Lanka’s consumer prices continued their record ascent in June, with the headline rate breaching hyperinflation levels amid a persistent shortage of essentials from food to fuel.
Official data showed consumer prices in capital Colombo rose 54.6% from a year earlier, beating predictions for a 43.7% gain in a Bloomberg survey of economists. That pushes the key price gauge past the 50% level that most economists commonly use to define hyperinflation.
The figures are the final price print before the Central Bank of Sri Lanka’s next interest-rate decision on July 7. While the monetary authority left borrowing costs unchanged in May, policy makers may be forced to resume tightening to arrest runaway inflation, even though it’s a result of supply pressures.
Sri Lanka, which is in the midst of its worst economic crisis, this week restricted fuel supplies and told residents to stay home until July 10 to dampen demand. The move comes after Prime Minister Ranil Wickremesinghe last week said that the nation was unable to source fuel even for cash, as suppliers insist on clearance of past dues.
A rare piece of good news for the economy came from the International Monetary Fund on Thursday, when it said it’s made significant progress toward an aid program for the crisis-ridden nation. The help is contingent on Sri Lanka fulfilling conditions including steps to ensure debt sustainability and curtailing inflation.
