Development Economist and Principal Researcher, Point Pedro Institute of Development, Muttukrishna Sarvananthan has been quoted in the media saying that inflation would hit the sensitive double-digit sooner than later due to the fuel and electricity price hikes.
He has explained that 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.
He has observed that the foregoing figures are averages for the country as a whole. and there are differences between urban, rural, and estate areas, between different districts, and between different income groups, he has pointed out.
“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,” Sarvananthan has said.