Headline 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), continued to follow the declining trend exhibited since November 2017. As such, the year-on-year NCPI headline inflation decreased to 2.8 per cent in March 2018, lowest since April 2016, from 3.2 per cent in February 2018. The monthly decline in Food prices in March 2018 supported by the favourable supply conditions attributed to this sharp decline in year-on-year inflation in March 2018. The change in the NCPI measured on an annual average basis decreased from 7.2 per cent in February 2018 to 6.7 per cent in March 2018.
When monthly change is considered, the NCPI declined from 123.7 index points in February 2018 to 122.8 index points in March 2018 mainly due to the decline in prices of the items in the Food category, particularly that of vegetables, big onions, rice and red onions. Meanwhile, marginal price increases were observed in Alcoholic Beverages and Tobacco, Transport and Miscellaneous Goods and Services sub-categories.
The NCPI Core inflation, which reflects the underlying inflation in the economy, continued its declining trend observed since September 2017 and decreased to 1.9 per cent in March 2018 from 2.0 per cent in February 2018 on year-on-year basis. Annual average NCPI Core inflation declined to 3.6 per cent in March 2018 from 4.1 per cent in February 2018.