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Measures of Underlying Inflation in Sri Lanka
Author:
Souvik Gupta
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Mr. Magnus Saxegaard
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Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 167
Language:
English
Publication Date:
01 Aug 2009
DOI:
https://doi.org/10.5089/9781451873146.001
ISBN:
9781451873146
ISSN:
1018-5941
Pages:
22
Keywords:
WP; core inflation; headline inflation; core inflation rate; Sri Lanka; Monetary Policy; core inflation measure; measure of core inflation; core inflation granger; world commodity price shock; core inflation benefit; Inflation; Consumer price indexes; Cyclical indicators; Food prices; Fuel prices
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund