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), decreased to 3.2 per cent in February 2018 from 5.4 per cent in January 2018, on year-on-year basis. The high base prevailed in February 2017 as well as the monthly decline in Food prices in February 2018 supported by the favourable supply conditions attributed to this sharp decline in year-on-year inflation in February 2018.

The change in the NCPI measured on an annual average basis decreased from 7.6 per cent in January 2018 to 7.2 per cent in February 2018.

When the monthly change is considered, the NCPI declined from 125.8 index points in January 2018 to 123.7 index points in February 2018 largely due to the decline in prices of the items in the Food category, particularly that of vegetables, green chillies, red onions, rice and big onions. Meanwhile, price increases were observed in all the sub-categories in the Non-food category except for Communication sub-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 2.0 per cent in February 2018 from 2.1 per cent in January 2018 on year-on year basis. Annual average NCPI Core inflation declined to 4.1 per cent in February 2018 from 4.5 per cent in January 2018.