Friday February 08, 2008

Sri Lanka scraps CPI figures in attempt to hide inflation

thesundayleader.lk :

The Sri Lankan government, which has run out of every possible excuse from the war to the rising world oil prices to hoodwink the masses on the reasons behind the rising cost of living and inflation, has now resorted to scrap the offending consumer price indices itself. Unable to counter the rising level of inflation, the government has decided to scrap consumer price indexes that have recorded high levels. The Sri Lanka Consumer Price Index (SLCPI) recorded a staggering 26.2% rate of inflation for November 2007, which is the highest to be recorded since the inception of the index.

With price hikes reported in many sectors, consumers may have to face another shock when the CEB [Ceylon Electricity Board] increases its rates shortly. The CEB has recommended to the government an increase in commercial and domestic tariffs in addition to an across the board fuel surcharge of 20%. Amidst government claims that prices have seen a decline in the past week, consumers are yet to find any relief from the soaring prices. The government has imported rice to reduce prices in the local market, but the prices are yet to see a decline.

- This is an interesting tend : when official statistics start pointing out the overwhelming nature of the true inflation hitting us, the governments stop reporting the official figures. We saw it with the US government stopping its reporting of M3 money supply growth rate and a couple of private groups had to come in and fill up that gap. We saw it when Zimbabwe's government had stopped reporting its CPI inflation figures for the past 8 months and the IMF came in and estimated that Zimbabwe inflation was running at an incredible 150,000%.

As global inflation takes off and goes exponential, I'd suppose we can expect more official government sources stopping the reporting of money-supply and inflation-related statistics, and more private groups coming in to fill up the gaps. Oh, and by the way, Happy Chinese New Year. Like I said earlier, it's going to be an inflationary new year in 2008 and beyond. Hang on for the ride - it's going to be fun.

See also :

1. Zimbabwe: IMF estimates inflation at 150,000%
2. Zimbabwe : Not Reality TV
3. Rice prices are steaming, with many implications
4. M3 is back

(2008-02-08 14:13:29 SGT) [Biz] Permalink

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