Decomposition of food price inflation in Sri Lanka

Dinithi Malaviarachchi and Pradeepa Malkanthi Korale-Gedara

Journal of the Asia Pacific Economy, 2025, vol. 30, issue 4, 1506-1525

Abstract: The recent upsurge in food prices in Sri Lanka has raised significant concerns, posing a threat to the food and nutritional security of the population. However, the causal factors driving this inflation still need to be better understood. Our study, utilizing Cointegration and Vector Error Correction Models (VECM), investigates the role of supply and demand-side determinants of food inflation. The study identified changes in exchange rate, agricultural wages, fuel prices, money supply, and fertilizer prices as key drivers of food inflation in Sri Lanka. Expansion of the money supply exerted the most substantial influence on food inflation in the long run. At the same time, changes in world market prices were found to be the most influential determinants of food inflation in the short run. Findings underscore the need for a comprehensive strategy that combines supply-side enhancements and demand-side management to control food inflation in Sri Lanka.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13547860.2024.2378532 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rjapxx:v:30:y:2025:i:4:p:1506-1525

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rjap20

DOI: 10.1080/13547860.2024.2378532

Access Statistics for this article

Journal of the Asia Pacific Economy is currently edited by Leong Liew

More articles in Journal of the Asia Pacific Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().