June inflation jumps to 6.5%

• Food inflation accelerated to 3.3% YoY in June while non-food inflation climbed to 9.3% 

Headline inflation accelerated to 6.5 percent in June from 5.4 percent in May, driven by rising transport and food prices, as consumer prices continued to edge higher despite the economy’s broader recovery.

The Department of Census and Statistics (DCS) said the National Consumer Price Index (NCPI), rose to 222.3 points in June from 218.8 points in May, marking a 1.6 percent increase over the previous month. The monthly increase translated into an additional Rs. 1,772.48 in the representative market basket.

Food inflation accelerated to 3.3 percent year-on-year in June from 1.5 percent in May, while non-food inflation climbed to 9.3 percent from 8.6 percent, indicating that price pressures remained more pronounced outside the food basket. On a month-on-month basis, food prices contributed 1.11 percentage points to the overall increase, led by higher prices of fresh fish, vegetables, dried fish, green chillies, milk powder, eggs and limes. Lower prices of coconuts, rice, coconut oil and fresh fruits partly offset the increase.

Non-food items contributed a further 0.49 percentage points, with transport accounting for the largest share following higher petrol prices. Increases were also recorded in restaurants and hotels, clothing and footwear, housing and household maintenance, while prices of alcoholic beverages and recreation items declined slightly.

On a year-on-year basis, transport remained the single biggest contributor to inflation, adding 2.38 percentage points, followed by housing, water, electricity, gas and other fuels at 1.18 percentage points and restaurants and hotels at 0.48 percentage points. Food contributed 1.50 percentage points to annual inflation.