Headline inflation dips to 6.2% in Sept., core inflation up

Friday, 22 October 2021 00:00 - - {{hitsCtrl.values.hits}}

Headline inflation as measured by the year-on-year change based on the National Consumer Price Index (NCPI) for September was 6.2%, down from 6.7% in the previous month.

Core inflation, which reflects the underlying inflation by excluding volatile items of food, energy and transport groups in the economy, however, was 4.8% in September as against 4.7% in August.

The Department of Census and Statistics (DCS) said contributions to the inflation rate of September 2021 from the food group and non-food group are 4.6% and 1.6% respectively, whilst contributions of the food and non-food groups to the inflation in September 2020 were 5.5% and 0.8% respectively, resulting in a headline inflation of 6.4%. With respect to September 2020, the reported increase in the percentage of the food group was mainly due to the higher price levels that prevailed in the month of September 2021, particularly the prices of rice, coconut oil, vegetables, Mysore dhal, dried fish, fresh fish, and coconuts. Comparing the month-on-month changes, NCPI in September 2021 has increased to 147.5 from 147.1 reported in August 2021. This shows an increase of 0.4 index points or 0.3% as compared to August 2021. The month-on-month change was contributed to by the increases of index values of food items by 0.07% and non-food items by 0.18% respectively.

DCS said price increases of food items were reported for Mysore dhal, big onions, fresh fish, chicken, dried fish, bread, buns, wheat flour, garlic, chili powder, biscuits, limes and canned fish. However, decreases in index values were reported for rice, vegetables, sugar, coconut oil, coconuts, and red onions.

It said the increases in index values of non-food groups in September 2021 compared to the previous month was mainly due to the price increases in groups of items ‘Alcoholic Beverages, Tobacco and Narcotics’ (Arecanuts), ‘Housing, Water, Electricity, Gas and Other fuels’ (LP gas), ‘Furnishing, Household equipment and Routine household maintenance,’ ‘Health’ (Purchase of medical/Pharmacy products), ‘Education’ and ‘Restaurants and Hotels’.

Further, a very slight price increase was reported in the group of ‘Miscellaneous Goods and Services’ as well. Meanwhile, the price indices of ‘Clothing and Footwear,’ ‘Transport,’ ‘Communication’ and ‘Recreation and Culture’ groups remained unchanged during the month.