Bright side: Global crisis eases inflationary pressures here-CB
The global slowdown arising out of the financial crisis, first triggered in the United States, has led to an easing of commodity prices and as a result lowered inflationary pressures in the Sri Lankan economy, the Central Bank said on Monday morning.
In a statement – before Colombo’s financial, commodity and stockmarkets opened today – the Bank said declining trends in inflation are seen continuing into November. Inflation which reached 24.3 % in September has been declining from the peak of 28.2 % in June. 2008.
It said the global slowdown, evident by the downward revision to growth prospects of many countries, has moderated international commodity prices. Decreasing external price pressures, reduced demand pressures due to the tight monetary policy stance adopted by the Central Bank to curb demand driven inflation, as well as domestic supply side improvements, in particular the record high levels of output in respect of many agricultural products including rice, have lowered inflationary pressures in the economy, it said.
The Bank said it sees steady deceleration in the growth of the broad money supply, helped by a slowing down of credit by commercial banks to the private sector as well as public corporations, continuing. “The outcome of these developments would be evident in the forthcoming months through a further deceleration in inflation,” the statement added.