Inflation declined to 5.4% in January

Issuing National Consumer Price Index (NCPI), for the month of January 2018, Dr. Amara Satharasinghe, Director General of Census and Statistics said that the Year on Year inflation based on NCPI has declined to 5.4% from 7.3% in December 2017.

He further added that inflation of 5.4% reported for January 2018 is the lowest inflation reported since January 2017. Contributions to the inflation in January 2018 from food group and non-food group are 4.0% and 1.4% respectively, whilst contributions of these two groups to the inflation in January 2017 were 2.9% and 3.6% respectively, resulting headline inflation of 6.5%.

However, when compared to month on month changes, NCPI in January 2018 has decreased to 125.8 from 126.6 reported in December 2017. This shows a decrease of 0.8 index points or 0.6 percentage points in January 2018 as compared to December 2017. This month on month change was due to the decrease of expenditure value of food items by 0.78% and increase of non-food items by 0.11%.

The decrease in expenditure value of food items was due to the price decreases of vegetables, green chilies, coconuts, red onions, rice, limes, big onions, mysore dhal, potatoes, garlic and eggs. However, increases in expenditure value in index were reported for fresh fish, banana, mangoes, papaw, chicken, chili powder and dried fish.

The increase in expenditure value of non-food items in January 2018 compared to the previous month was due to the expenditure value increases in groups of ‘Restaurant and Hotels’, ‘Transport’, ‘Miscellaneous Goods and Services’, ‘Education’, ‘Health’ and ‘Clothing and Footwear’. Further, the groups of ‘Furnishing, Household equipment and Routine household maintenance’ and ‘Alcoholic beverages, Tobacco and Narcotics’ recorded very slight expenditure value increases compared to the preceding month. The expenditure value of ‘Housing, Water, Electricity, Gas and Other fuels’, ‘Communication’ and ‘Recreation and Culture’ groups remained unchanged during this month.