Inflation drops to 4.5% in August

Inflation, as measured by the change in the National Consumer Price Index (NCPI), decreased to 4.5% in August 2016 from 5.8% in July 2016, on year-on-year basis, the Census and Statistics Department said yesterday, in a change mostly attributed to food.  

Both Food and Nonfood categories contributed towards the year-on-year inflation in August 2016.

The change in the NCPI measured on an annual average basis increased to 3.6% in August 2016 from 3.4% in July 2016.

When the monthly change in the NCPI is considered, the NCPI decreased by 1.6 % to 113.3 index points in August 2016 from 115.2 index points in July 2016. This monthly decrease was mainly due to the decrease in prices of the items in the Food category. Prices of vegetables, green chillies, sugar, coconut, sprats, rice, dhal and red onions decreased during the month, the Census and Statistics Department said in a statement.  

Within the Non-food category prices in Health; Communication; and Recreation and Culture subcategories decreased during August 2016. Clothing and Footwear; Furnishing, Household Equipment and Routine Household Maintenance; Transport; Restaurants and Hotels and Miscellaneous Goods and Services sub-categories increased during August 2016. 

Meanwhile, prices in Alcoholic Beverages and Tobacco increased in August 2016. Nevertheless, prices in Education sub-category remained unchanged during the month. The NCPI Core inflation, which reflects the underlying inflation in the economy decreased to 6.0% in August 2016 from 6.8% in July 2016, on year-on-year basis. 

Annual average NCPI Core inflation increased marginally to 5.6% in August 2016 from 5.5% in July 2016.