National inflation drops to 2.1 percent in June

National inflation drops to 2.1 percent in June

July 23, 2019   11:12 am

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Issuing National Consumer Price Index (NCPI), for the month of June 2019, Director General of Census and Statistics said that headline inflation as measured by the Year on Year change (The percentage change in the current month NCPI over same month NCPI of last year) based on NCPI has been compiled as 2.1%.

The headline inflation reported for the month of May 2019 was 3.5%.

Contributions to the inflation in June 2019 from food group and non-food group are -1.3% and 3.4% respectively.

With respect to June 2018, the reported decrease in the percentage of food group was mainly due to lower price levels prevailed in this month of June 2019, particularly prices of coconuts, vegetables and rice.

Whilst contributions of food and non-food groups to the inflation in June 2018 were 0.3% and 2.3% respectively, resulting in headline inflation of 2.5%.

When compared to a month on month changes, NCPI in June 2019 has increased to 129.2 from 128.7 reported in May 2019. This shows an increase of 0.5 index points that is a percentage of 0.4 was reported in June 2019 as compared to May 2019.

This month on month change was contributed by increases in expenditure value of food items by 0.37% and non-food items by 0.05% respectively.

The increases in expenditure value of food items were reported for fresh fish, big onions, green chillies, red onions, rice, potatoes, limes, dried fish, milk powder and banana. However, decreases in expenditure value of food items were reported for Vegetables, Coconuts, Chicken and Eggs.

The increases in expenditure value of non-food groups in June 2019 compared to the previous month was due to the expenditure value increases in groups of items ‘Transport’ (Fuel prices and Airline fare), ‘Restaurants and Hotels’, ‘Furnishing, Household Equipment and Routine household maintenance’ and ‘Clothing and Footwear’.

However, a decrease in expenditure value was reported in a group of ‘Alcoholic beverages, Tobacco and Narcotics’ (Betel leaves) compared to the preceding month.

Further, a very slight decrease in expenditure value was reported in a group of ‘Miscellaneous Goods and Services’. Meanwhile, the expenditure value of ‘Housing, Water, Electricity, Gas and Other Fuels’, ‘Health’, ‘Communication’, ‘Recreation and Culture’ and ‘Education’ groups remained unchanged during the month.

The 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 June 2019, has declined to 6.1% from 6.3% in May 2019.

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