Inflation, as measured by the change in the National Consumer Price Index (NCPI) (2013=100), which is compiled by the Department of Census and Statistics (DCS), increased to 8.8 per cent in October 2017 from 8.6 per cent in September 2017, on year-on-year basis.

The change in the NCPI measured on an annual average basis increased from 6.8 per cent in September 2017 to 7.1 per cent in October 2017.

When the monthly change is considered, the NCPI increased from 123.3 index points in September 2017 to 124.8 index points in October 2017. This monthly increase was mainly due to the increase in prices of the items in the Food category which was led by adverse supply side developments. Price increase of coconuts, vegetables and rice were prominent. Nevertheless, prices of fresh fish and eggs declined. Meanwhile, the impact of LP Gas price revisions introduced in September 2017 was also observable. Furthermore, Restaurants and Hotels subcategory too recorded a price increase during the month.

In order to monitor the developments in the real estate sector, Central Bank of Sri Lanka (CBSL) has been compiling and analyzing several indicators. The bi-annual Land Price Index (LPI) which is compiled covering the Colombo District since 1998 is one of the indicators of this nature. In the compilation process of LPI, CBSL uses the land price data collected by the Valuation Department of Sri Lanka covering around 50 centers of five Divisional Secretariat (DS) divisions1 in the Colombo District. In view of the diverse nature of the land use and to maintain homogeneity, three indices for residential, commercial and industrial lands are computed separately. The overall LPI is computed by taking the average of these three sub-indices.

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