Inflation spikes to 8.6% in March

Inflation, as measured by the change in the National Consumer Price Index (NCPI), which is compiled by the Department of Census and Statistics, increased to 8.6% in March 2017 from 8.2% in February 2017, on a year-on-year (y-o-y) basis. 

Both the Food and Non-food categories contributed towards the y-o-y inflation in March 2017, Department of Census and Statistics said in a statement yesterday. 

Contributions to the inflation from Food and Non-food categories in March 2017 were 4.9% and 3.8% respectively, compared to the contributions of these groups to the inflation in March 2016 which were as low as 0.2% and 2.0% respectively, reflecting prevailed lowest price levels in March 2016.     

It was pointed out that during the year 2016, the lowest price level was reported for the month of March, and this can be considered the main reason for the observed slight increase in inflation reported for March 2017.

However, when compared to month on month changes in the NCPI, March 2017 has declined to 119.5 from 119.9 reported for February 2017. This shows a decrease of 0.4 index points or 0.3% points in March 2017 compared to the previous month.  NCPI complied for February 2017 was 119.9. This monthly change was due to the decrease of expenditure value of food items by 0.38% and increase of expenditure value of non-food items by 0.03%. 

The decrease in expenditure value of food items was due to the price decreases in rice, limes, banana, green chilies, potatoes, Mysore dhal, dried chilies and chili powder. However, increases in expenditure value in index were reported for coconuts, vegetables, papaw, sugar, coconut oil, mangoes, dried fish and garlic. 

The increase in expenditure value of non food items in March 2017 compared to the preceding month was due to the expenditure value increases in groups of ‘Furnishing, Household equipment and Routine household maintenance’, ‘Clothing and Footwear’ and ‘Miscellaneous Goods and Services’. 

Further, a slight increase in expenditure value was reported for the group of ‘Restaurant and Hotels’ and very slight decreases in expenditure value were reported for groups of ‘Alcoholic beverages, Tobacco and Narcotics’, ‘Recreation and Culture’ compared to the previous month. The expenditure value of ‘Housing, Water, Electricity, Gas and Other fuels’, ‘Health’, ‘Transport’, ‘Communication’ and ‘Education’ categories remained unchanged during the month.