Inflation In June 2017

Inflation, as measured by the change in the National Consumer Price Index (NCPI) (2013=100), which is compiled by the Department of Census and Statistics (DCS), decelerated to 6.3 per cent in June 2017 from 7.1 per cent in May 2017, on year-on-year basis. Both Food and Non-food categories contributed towards the year-on-year inflation in June 2017.

The change in the NCPI measured on an annual average basis remained at 6.1 per cent in June 2017, at same level of the previous month.

When the monthly change is considered, the NCPI increased from 121.8 index points in May 2017 to 123.4 index points in June 2017. This monthly increase was mainly due to the increase in prices of the items in the Food category. Within the Food category, prices of vegetables, rice, fresh fish, green chillies, red onions, dried fish (sprats) and chicken increased during the month. In the Non-food category, prices of items in Furnishing, Household Equipment and Routine Household Maintenance (Wages to servants and Wages to drivers); Miscellaneous Goods and Services; and Clothing and Footwear sub-categories increased. Alcoholic Beverages and Tobacco (areca nuts) sub-category also increased during June 2017. Prices in Health subcategory recorded decrease during the month. Meanwhile, prices in Housing, Water, Electricity, Gas and Other Fuels; Transport; Communication; Recreation and Culture; Education; and Restaurants and Hotels sub-categories remained unchanged during the month.

The NCPI Core inflation, which reflects the underlying inflation in the economy decreased to 4.1 per cent in June 2017 from 4.7 per cent in May 2017 on a year-on-year basis. This decline is due to relatively low monthly increase of items excluding Volatile food, Energy and Transport categories. Annual average NCPI Core inflation also declined from 6.4 per cent in May 2017 to 6.1 per cent in June 2017.

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