Inflation spikes to 47-month high of 8.3% in October

Headline inflation as per the National Consumer Price Index (NCPI) in October has risen to 8.3% as against 6.2% in September, the Director General of Census and Statistics said yesterday.

According to Wealth Trust Securities the October inflation reflects a 47-month high. 

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 (YOY) change based on NCPI for the month of October 2021, increased to 7.2% from 4.8% reported in month of September 2021.

The Census and Statistics Department (DCS) said contributions to the inflation rate of October 2021 from the food group and non-food group were 5.4% and 2.9% respectively, whilst contributions of food and non-food groups to the inflation in October 2020 were 4.6% and 0.8% respectively, resulting in headline inflation of 5.5%. 

With respect to October 2020, the reported inflation for the month of October 2021 was mainly due to the higher price levels prevailed in both food and non-food groups in the month of October 2021. 

DCS said the YOY inflation of the food group increased to 11.7% in October 2021 from 10% in September 2021 and YOY inflation of the non-food group increased to 5.4% in October 2021 from 3% in September 2021.

Comparing the month-on-month changes, NCPI in October 2021 has increased to 150.6 from 147.5 reported in September 2021. This shows an increase of 3.1 index points, or 2.1% as compared to September 2021. The month-on-month change was contributed by increases of index values of food items by 0.89% and non-food items by 1.23% respectively. 

DCS said price increases of food items were reported for milk powder, rice, big onions, Mysore dhal, fresh fruits, chicken, bread, limes, vegetables, wheat flour, fresh fish, buns, biscuits, turmeric powder, rice flour, chili powder and curry powder. However, decreases in index values were reported for potatoes, coconut oil, sugar, red onions, green chilies and green gram.

The increases in index values of non-food groups in October 2021 compared to the previous month was mainly due to the price increases in groups of items ‘alcoholic beverages, tobacco and narcotics’ (tobacco chewing), ‘clothing and footwear’, ‘housing, water, electricity, gas and other fuels’ (LP gas), ‘furnishing, household equipment and routine household maintenance’, ‘health’ (fees to private/ayurvedic medical practices), ‘transport’ (lubricating oil and petrol) ‘recreation and culture’, ‘education’ (tuition fees), ‘restaurants and hotels’ and ‘miscellaneous goods and services’. Meanwhile, the price index of the ‘Communication’ group remained unchanged during the month.