Measures of Underlying Inflation in Sri Lanka

Author/Editor:

Souvik Gupta ; Magnus Saxegaard

Publication Date:

August 1, 2009

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

During the first half of 2008, Sri Lanka witnessed significantly higher inflation than most other emerging Asian countries. Inflation has since declined amid declining world commodity prices and tight monetary policy. Given the sensitivity to global commodity prices, a core inflation measure could be useful for monetary policy. The purpose of this paper is to compare the performance of Sri Lanka's existing official measure of core inflation against alternative measures. Our findings suggest that the existing measure does contain information about the future path of headline information, but may be inadequate as a communication tool for the Central Bank.

Series:

Working Paper No. 2009/167

Subject:

Consumer price indexes Cyclical indicators Economic growth Food prices Fuel prices Inflation Prices

English

Publication Date:

August 1, 2009

ISBN/ISSN:

9781451873146/1018-5941

Stock No:

WPIEA2009167

Pages:

22

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