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Comment on Inflation

Comment on Inflation

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Published by Baksp Banagoda

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Categories:Types, Reviews, Art
Published by: Baksp Banagoda on Nov 24, 2012
Copyright:Attribution Non-commercial


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Inflation can be statedasin the value of money. Normallydoes not refer to changes in onewhen the overall level of pricesand continue over a period longbusinessesact differently than tborrow more as they will undeinflation rises. Creditors will ha1
a continuous rise in the general price level or,inflation refers to the movement in the generalprice relative to other prices and these changesis
stable. The rise in the pricelevel must be soer than a day, week, or month.During this tiey would ifthe economy were growing steadilrstand the loan re-payments will be worth lee to raise interest to maintain their profits.
as a sustained falllevel of prices. Itare common evenewhat substantiale, consumers andy. Consumers wills and less as the
2Economic and Social Infrastructure (energy sector performance)
2007 2008 2009 2010
Average price of abarrel(Rs)8,11310,4947,3438,985*Quantity Imported:Crude Oil(mt000)1938185320661819*Refined (mt000)2216210321352936*Value of Imports:Crude Oil(Rs mn)113,584143,159111,715120,180*Refined (Rs mn)150,3901,3239731,064**provisionalSource: Central Bank of Sri Lanka Annual Report 2010
Inflation in Sri Lanka has been varying from single digit to double digit during the past. Ithad touched upon 26.15 in 1980 and reduced to a single digit later. It had been on the risefrom11.64 since 2005 and had been on the rise up to 22.56 in 2008. This was a sharp increase from15.84 which was recordedin 2007. Adverse developments inthe commodity prices contributed tothe increase in the index values in the first half of 2008. The low supply of domesticallyproducedagricultural commodities and the very high prices of imports, particularly food items, crudeoiland petroleum products, in the international marketcontributed negatively. The upward revisionsof the fuel prices,in late May 2008, too had a significant impact on theCCPI. However theimprovementsin the domestic supply, especially the paddy harvest in the Yala season, and theeasing of commodity prices in the international market further helped the deceleration in the rateof increase in the index in the second half of the year.Referencehttp://www.tradingeconomics.com/sri-lanka/inflation-cpi, “Sri Lanka Inflation rate” accessed on17Apr 2012http://www.indexmundi.com/facts/sri-lanka/inflation, “Sri Lanka Inflation” accessed on 17 Apr2012

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