Inflation to hit double digit soon

Tuesday, 30 April 2013 

Economists have said that inflation would hit the sensitive double-digit sooner than later due to the fuel and electricity price hikes.

According to the latest Household Income and Expenditure Survey (HIES 2009/10) undertaken by the Department of Census and Statistics, the average (mean) monthly household expenditure (nationally) was Rs.31,331; out of which Rs.18,064 (57.7%) was non-food expenditure. Out of the total non-food expenditure the second highest expenditure (after housing) is spent on transport. That is, on average, every household spends Rs. 2,317 (or 12.8% of the total non-food expenditure) for transport.

In addition, average monthly household expenditure on fuel and light is Rs. 1,278 or 7.1% of the total non-food expenditure. Thus, almost 20% of the non-food expenditure is spent on transport and fuel/light.

The foregoing figures are averages for the country as a whole and of course, there are differences between urban, rural, and estate areas, between different districts, and between different income groups.

According to economists, the 20% national average expenditure (out of the total non-food expenditure) for transport and fuel/light will have considerable impact on inflation. Inflation would hit the sensitive double-digit sooner than later due to the fuel and electricity price hikes, they have said.

REDUCING ELECTRICITY TARIFFS BY 20% WILL NOT SOLVE THE PROBLEM

April 30, 2013 

The President has advised the Power and Energy Ministry to reduce the electricity tariff hike by 20%, the UNP claims, adding that increasing the tariff by 100% and then reducing it by 20% will make not solve the problem.

UNP General Secretary Tissa Attanayake stated that the President will announce tomorrow (May 1) at the May Day rally that he has directed the Ministry to reduce the tariff increase for bills under 150 units by 20%.

He said that the President, without attending the cabinet meetings, will throw the cabinet into the fire to score points with the public.

However, speaking at a press conference held in Colombo today (April 30), MP Attanayake said that increasing the tariff by 100% and then reducing it by 20% will not solve the issue as a further 80% will continue to burden the people.

He also pointed out that Minister Wimal Weerawansa will hold a separate rally tomorrow under the banner of the National Freedom Front while he has also made it compulsory for the employees of the National Housing Authority to participate in the rally.

Attanayake said that the government is forcing state workers to join its various rallies, bring them for the rallies in SLTB busses.