Inflation declines to 5.2% in May

Headline inflation as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI) decreased further to 5.2% in May from 5.9% in April. 

This was mainly driven by the statistical effect of the high base prevailed in May 2019.  Meanwhile, Food inflation (Y-o-Y) declined to 11.1% in May from 12.2% in April and Non-food inflation (Y-o-Y) also declined to 0.8% in May from 1.1% in April.

The change in the NCPI measured on an annual average basis increased marginally to 5.2% in May from 5.1% in April. Monthly change of NCPI was at 0.4% in May mainly due to increases observed in prices of items in the Food category. 

Accordingly, within the Food category, increases were observed mainly in the prices of vegetables, fresh fish, dhal and coconut oil during May. 

However, it is noteworthy that prices of big onions and coconuts reported significant declines during the month. Meanwhile, within the Non-food category, prices of the items in Alcoholic Beverages, Tobacco and Narcotics (betel leaves); and Recreation and Culture (newspapers) subcategories declined in May.

Further, core inflation (Y-o-Y) increased to 3.7% in May from 3.2% in April while annual average core inflation decreased to 4.8% in May from 5% in April.