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, increased to 5.3 per cent in May 2016 from 4.3 per cent in April 2016, on year-on-year basis. Both Food and all Nonfood categories except for the Housing, Water, Electricity, Gas, and Other Fuels sub-category contributed towards the increase in year-on-year inflation.
The change in the NCPI measured on an annual average basis increased to 2.7 per cent in May 2016 from 2.6 per cent in April 2016.
When the monthly change in the NCPI is considered, the NCPI increased by 1.9 per cent from April 2016 to May 2016. This monthly increase was mainly due to the increase in prices of the items in the Non-food category. Prices in Clothing and Footwear; Housing, Water, Electricity, Gas, and Other Fuels; Furnishing, Household Equipment and Routine Household Maintenance; Health; Communication; Recreation and Culture; Restaurants and Hotels and Miscellaneous Goods and Services sub-categories increased during May 2016. The direct impact of recent changes in taxes was also observed in this monthly increase in NCPI. Prices of Food and Non Alcoholic Beverages category also increased in May 2016. Prices of vegetables, rice, limes, potatoes, dhal, red onion, green chillies, sugar and dried fish increased during the month. Meanwhile, prices in Alcoholic Beverages and Tobacco sub-category decreased during May 2016. Nevertheless, Transport and Education sub-categories remained unchanged during the month.
Meanwhile, NCPI Core inflation, which reflects the underlying inflation in the economy increased to 7.0 per cent in May 2016 from 5.6 percent in April 2016, on a year-on-year basis. Annual average NCPI Core inflation increased to 4.6 per cent in May 2016 from 4.3 per cent in April 2016.