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 subcategories in the Non-food category. 

The Manufacturing Sector PMI recorded 51.7 index points in January from 59.1 index points in December 2017. This indicates that the Manufacturing activities expanded at a slower rate in January compared to December 2017 after the seasonal peak observed during last two months of the year 2017. This was mainly driven by the slowdown in the Production and New Orders sub-indices. Further, the Employment sub-index also slowed down during the month as compared to December 2017 while Stock of Purchases subindex contracted during the month. Meanwhile, the Suppliers’ Delivery Time sub-index lengthened at a slower rate compared to previous month. Overall, all the sub-indices of PMI except from stock of purchases sub-index recorded values above the neutral 50.0 threshold signalling an overall expansion in January 2018. Moreover, The Expectation for activities indicates an improvement for the next three months.