Sri Lanka Inflation Slows for First Time in Year in October

(Bloomberg) -- Sri Lanka’s inflation slowed in October for the first time in a year as shortages of food and fuel eased.

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The consumer price index in the capital Colombo cooled to 66% from a year ago, the statistics department said in a statement Monday. That’s down from 69.8% in September and a median of 68.5% in a Bloomberg survey.

Transport costs stood at 150.4% and food prices came in at 94.9%, the data showed.

The numbers are a welcome development for Sri Lanka’s monetary authority, which expected inflation to peak this month. The Central Bank of Sri Lanka has kept the benchmark rate steady at 15.5% for the last two meetings after hiking borrowing costs by 9.5 percentage points this year. The next monetary policy review is scheduled for November 24.

Falling global commodity prices, assistance from friendly countries and re-purposed funds from multilateral lenders have helped Sri Lanka stabilize its finances in the short run. Supplies of food, fuel and medicines are trickling in as officials pursue a debt restructuring deal with global creditors, that’s key to unlock the International Monetary Fund’s $2.9 billion bailout package.

--With assistance from Tomoko Sato.

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