decreased to 2.5 per cent in August 2018 from 3.4 per cent in July 2018, on year-on-year basis,mainly driven by monthly decline in Food prices in August 2018. 

The change in the NCPImeasured on an annual average basis decreased from 5.1 per cent in July 2018 to 4.7 per cent inAugust 2018.when the monthly change is considered, the NCPI decreased from 126.6 index points in July 2018to 125.4 index points in August 2018 largely due to decline in prices of the items in the Foodcategory, particularly that of vegetables, coconuts, green chilies and fresh fish. Meanwhile, priceincreases were observed in the sub-categories in the Non-food category, particularly that of petrol,diesel and taxi in the Transport sub-category; some items in the Housing, Water, Electricity, Gasand Other Fuels; Furnishing, Household equipment and household maintenance; and Alcoholicbeverages and Tobacco.

The NCPI Core inflation, which reflects the underlying inflation in the economy, increased to 2.7Percent in August 2018 from 2.3 per cent in July 2018 on year-on-year basis. Meanwhile, annual average NCPI Core inflation declined to 2.5 per cent in August 2018 from 2.7 per cent in July2018