Mar 31, Colombo: The International Monetary Fund (IMF) said that the increase of global crude prices is not the complete reason for Sri Lanka's inflation, but local mismanagement of economy.

The IMF report that studied Sri Lanka's inflation in 2006 and 2007 found that ‘external shock’ such as oil prices were only partly to blame.

“Since late 2006, Sri Lanka's inflation has increased sharply relative to other economies in the region,” its latest report said.

“The sharp increase in inflation compared to other countries in Asia points out that increases in oil prices in the recent past cannot explain most of the increase in inflation in Sri Lanka.”

Sri Lanka’s inflation rate rose to 24.0 percent in February, up from 21.6 percent in January and 7.1 percent a year earlier.

It said only 25 percent of recent consumer inflation could be explained by external factors with oil accounting for about six percent, import prices 11 percent and the exchange rate about 10 percent, it added.

“With external shock not playing a major role in influencing domestic inflation, domestic policies can be very important in containing inflation,” the report added.