Inflation at 6.7% in August

Headline inflation as measured by the Year-on-Year change based on the National Consumer Price Index (NCPI) has been compiled as 6.7% marginally down from 6.8% in July.  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 August 2021, increased to 4.7% from 4.4% reported in month of July 2021.

The Department of Census and Statistics (DCS) said yesterday contributions to the inflation rate of August 2021 from food group and non-food group were 5.1% and 1.7% respectively, whilst contributions of food and non-food groups to the inflation in August 2020 were 5.7% and 0.6% respectively, resulting in a headline inflation of 6.2%. 

With respect to August 2020, the reported increase in percentage of food group was mainly due to the higher price levels that prevailed in August 2021, particularly prices of rice, vegetables, coconut oil, coconuts, Mysore dhal and big onions. 

DCS said comparing the month-on-month changes, NCPI in August 2021 had increased to 147.1 from 146.6 reported in July 2021. This shows an increase of 0.5 index points or 0.3 percentage as compared to July 2021. The month-on-month change was contributed by increases of index values of food items by 0.25% and non-food items by 0.11% respectively. 

Price increases of food items were reported for sugar, potatoes, fresh fish, Mysore dhal, chicken, dried fish, fresh fruits, biscuits, eggs, canned fish, turmeric powder, wheat flour, soya meat, curry powder, and chili powder. However, decreases in index values were reported for rice, coconut oil, coconuts, red onions and green chilies.

The increases in index values of non-food groups in August 2021 compared to the previous month was mainly due to the price increases in groups of items ‘Alcoholic Beverages, Tobacco and Narcotics’ (arecanuts), ‘Clothing and Footwear,’ ‘Furnishing, Household Equipment and Routine Household Maintenance,’ ‘Health’ (payments to private hospitals/nursing homes room charges) and ‘Restaurants and Hotels’. Further, very slight price increases were reported in groups of ‘Recreation and Culture’ and ‘Miscellaneous Goods and Services’ as well.

However, price decrease in group of items was reported in ‘Housing, Water, Electricity, Gas and Other Fuels’ (LP gas) compared to the preceding month.  

DCS said the price indices of ‘Transport,’ ‘Communication’ and ‘Education’ groups remained unchanged during the month.