Purchasing Managers’ Indices for both Manufacturing and Services activities decreased in April 2023.

Following the seasonal pattern, Manufacturing PMI decreased to 34.7 in April 2023, indicating a month-on-month contraction in manufacturing activities. Accordingly, Production, New Orders, Employment and Stock of Purchases subindices declined during April compared to the seasonal peak in March.

Services sector PMI remained slightly below the neutral threshold recording an index value of 49.6 in April 2023, led by the decreases observed in New Businesses, Employment and Backlogs of Works. Nevertheless, Business Activities and Expectations for Activity continued to increase during the month.

Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) decreased to 35.3% in April 2023 from 50.3% in March 2023. The lower level of realised inflation compared to the projections made, was mainly due to higher than expected price decreases observed in Volatile Food and Non-Food items.

The Food inflation (Y-o-Y) decreased to 30.6% in April 2023 from 47.6% in March 2023, while the Non-Food inflation (Y-o-Y) decreased to 37.6% in April 2023 from 51.7% in March 2023. Monthly change of CCPI recorded at -1.39% in April 2023, which is the highest monthly decline recorded so far in CCPI (2021=100) series. This decrease was mainly due to price decreases observed in the items of Non-Food category, which was -1.37%. Meanwhile, the Food category also recorded a monthly decline of 0.02%. The core inflation (Y-o-Y), which reflects the underlying inflation in the economy, decreased to 27.8% in April 2023 from 39.1% in March 2023.