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), decreased to 5.4 per cent in January 2018 from 7.3 per cent in December 2017, on year-on-year basis. This decline is due to the high base prevailed in January 2017 as well as the monthly decline in Food prices in January 2018.

The change in the NCPI measured on an annual average basis decreased from 7.7 per cent in December 2017 to 7.6 per cent in January 2018.

When the monthly change is considered, the NCPI decreased from 126.6 index points in December 2017 to 125.8 index points in January 2018. This monthly decline was mainly due to the decline in prices of the items in the Food category, particularly that of vegetables, green chillies, coconuts, red onions and rice. Nevertheless, prices of fresh fish and some fruits increased. Meanwhile, price increases were observed in Restaurants and Hotels; and Transport sub-categories in the Non-food category.

The NCPI Core inflation, which reflects the underlying inflation in the economy, continued to follow the declining trend exhibited since September 2017. As such, the NCPI Core inflation decreased to 2.1 per cent in January 2018 from 2.7 per cent in December 2017 on year-on-year basis. Annual average NCPI Core inflation declined to 4.5 per cent in January 2018 from 4.9 per cent in December 2017.