Food inflation eased to 6.6 per cent from 7.6 per cent in October.
In its latest monetary policy, the Central Bank said this partly due to the zero-rating of Value Added Tax on additional food items from November 2021.
It says core inflation which excludes food items remained steady at around 3 per cent.
However, the Bank said indications are that imported inflation will continue to push up local prices of food and other items in the coming months.
Preliminary estimates from the Central Bank’s Quarterly Index of Economic Activity suggest higher crude oil and petrochemical production spearheaded a return to positive growth in energy sector activity during the fourth quarter of 2021.
Although indicators of non-energy sector activity point to continued softness, the continued rollback of COVID-19 restrictions has boosted business operations, supported by bank financing.
The Central Bank said it will continue to carefully monitor and analyze international and domestic developments and prospects.
The next Monetary Policy Announcement is scheduled for June 24, 2022.