4.6% inflation in December; lower from 5.2% in November

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Headline inflation in December as measured by the Year-on-Year change based on the National Consumer Price Index (NCPI) has been compiled as 4.6%, lower in comparison to 5.2% in the previous month, the Department of Census and Statistics (DCS) said yesterday.

Core inflation, which reflects the underlying inflation by excluding volatile items of food, energy and transport groups in the economy as measured by the Year-on-Year change based on NCPI for the month of December 2020 has increased to 4.7% from 4.5% in November 2020.

DCS said the Contributions to the inflation rate of December 2020 from food group and non-food group are 3.4% and 1.2% respectively. Whilst contributions of food and non-food groups to the inflation in December 2019 were 3.8% and 2.4% respectively, resulting in a headline inflation of 6.2%.

With respect to December 2019, the reported increase in percentage of food group was mainly due to higher price levels prevailed in this month of December 2020, particularly prices of coconuts, turmeric powder, coconut oil, mysoor dhal, big onions, chili powder and potatoes.

Comparing the month-on-month changes, NCPI in December 2020 has increased to 141.2 from 139.8 reported in November 2020. This shows an increase of 1.4 index points or 1.0 percentage as compared to November 2020. The month-on-month change was contributed by increases of index values of food items by 1.02% and non-food items by 0.01% respectively.

Price increases of food items were reported for coconuts, vegetables, potatoes, rice, red onions, green chilies, eggs, limes, mysoor dhal, fresh fish, big onions, dried fish, tamarind, chili powder, green gram, coconut oil, dried chilies and canned fish. However, price decreases of food items were reported for sugar and fresh fruits.

The increases in index values of non-food groups in December 2020 compared to the previous month was mainly due to the price increases in groups of items ‘Transport’ (Bus fare) and ‘Health’. Further, very slight price increases were reported in groups of ‘Clothing and Footwear’ and ‘Miscellaneous Goods and Services’.

However, price decrease in group of items was reported in ‘Alcoholic Beverages, Tobacco and Narcotics’ (Arecanuts) compared to the preceding month and very slight price decrease was reported in group of ‘Furnishing, Household equipment and Routine household maintenance’ as well.

DCS said the price indices of ‘Housing, Water, Electricity, Gas and Other fuels’, ‘Communication’, ‘Recreation and Culture’, ‘Education’ and ‘Restaurants and Hotels’ groups remained unchanged during the month.