Headline inflation as measured by the year-on-year change in the National Consumer Price Index (NCPI, 2013=100) continued to decline for the third consecutive month, recording 0.1 per cent in October 2018, the lowest since January 2016. The deceleration observed in year-on-year inflation in October 2018 is mainly driven by the higher base prevailed during the corresponding month of the previous year due to higher food prices. Year-on-year Food inflation dropped for the third consecutive month and recorded -6.6 per cent in October 2018. However, year-on-year Non-food inflation continued to increase and reached 5.8 per cent during the month.

The change in the NCPI measured on an annual average basis decreased to 3.3 per cent in October 2018 from 4.0 per cent in September 2018.

Sri Lanka Prosperity Index (SLPI), increased to 0.771 in 2017 from 0.661 recorded in 2016, mainly due to improvements in ‘Economy and Business Climate’ and ‘Socio-Economic Infrastructure’ sub-indices. Economy and Business Climate sub-index has improved during 2017, due to increase in per capita Gross Domestic Product (GDP) and enhancements of the aspects associated with employment. With regard to the sub-index of Socio-Economic Infrastructure, improvements to the road network with the extensions to the expressways, construction of bridges and flyover projects, availability of electricity facilities and improvements in pipe borne water quality were the key drivers. Even though ‘Well-being of the People’ sub-index has declined during 2017 mainly due to the reduced levels of purity of environment and air quality, improvements were recorded in the aspects of availability of healthcare facilities, availability and quality of education, wealth of people and their engagement in entertainment activities.