Headline inflation as measured by the year-on-year change in the National Consumer Price Index (NCPI, 2013=100) increased to 1.2 per cent in January 2019 from 0.4 per cent in December 2018. The increase observed in year-on-year inflation in January 2019 is driven by the base effect and increase of prices of items in Non-food category. Year-on-year Non-food inflation increased to 6.5 per cent in January 2019 from 4.7 per cent in December 2018. However, year-on-year Food inflation decreased further to -4.8 per cent in January 2019 from -4.5 per cent in December 2018.
The change in the NCPI measured on an annual average basis decreased to 1.8 per cent in January 2019 from 2.1 per cent in December 2018.
The month on month change of the NCPI was increased by 0.2 per cent in January 2019, mainly due to increase in the prices of the items in the Non-Food category where Housing, Water, Electricity, Gas and Other Fuels sub-category (Housing Rent) recorded the highest increase. Moreover, prices of items in the Alcoholic Beverages and Tobacco; Clothing and Footwear; and Furnishings, Household Equipment and Routine Household Maintenance sub-categories also reported increases during the month. Meanwhile, prices of the items in the Food category decreased where vegetables, coconuts, limes, big onions, potatoes and green chillies recorded prominent decreases.
The core inflation, which reflects the underlying inflation in the economy, increased significantly from 3.1 per cent in December 2018 to 5.1 per cent in January 2019 on year-on-year basis. Meanwhile, annual average core inflation also increased from 2.4 per cent in December 2018 to 2.7 per cent in January 2019.