Headline inflation down 2.5% in August; core inflation up 2.7%

The Central Bank said headline inflation, as measured by the change in the National Consumer Price Index (NCPI) compiled by the Department of Census and Statistics (DCS), decreased to 2.5% in August from 3.4% in July on year-on-year basis, mainly driven by monthly decline in food prices in August. 

The change in the NCPI measured on an annual average basis decreased from 5.1% in July to 4.7% in August.

When the monthly change is considered, the NCPI decreased from 126.6 index points in July to 125.4 index points in August largely due to decline in prices of the items in the Food category – particularly that of vegetables, coconuts, green chillies and fresh fish. 

Price increases were observed in the sub-categories in the Non-Food category – particularly that of petrol, diesel and taxi in the Transport sub-category; some items in Housing, Water, Electricity, Gas and Other Fuels categories, and Furnishing, Household Equipment and Household Maintenance; and Alcoholic Beverages and Tobacco.

The NCPI core inflation, which reflects the underlying inflation in the economy, increased to 2.7% in August from 2.3% in July on year-on-year basis. Meanwhile, annual/average NCPI core inflation declined to 2.5% in August from 2.7% in July.