The Consumer Price Index (CPI) fell by 0.2 index point, from 106.3 in November 2020 to 106.1 in December 2020. Compared to December 2019, the CPI increased by 2.8 index points. The year-on-year (y-o-y) CPI inflation subsided from 3.1 per cent in November 2020 to 2.7 per cent in December2020. However, on a 12-month average period, headline inflation edged up from 2.4 per cent to 2.5 per cent. Underlying inflationary pressures, as gauged by the Bank’s Core measures, remained broadly contained on a y-o-y basis in December 2020. Y-o-y, CORE1 and CORE2 inflation remained unchanged at 2.6 per cent and 3.7 per cent, respectively, in December 2020. On a 12- month average period, CORE1 inflation stood at 1.8 per cent in December 2020, up from 1.6 per cent in November 2020, while CORE2 inflation went up from 2.9 per cent in November 2020 to 3.1 per cent in December 2020.
CORE1 excludes “Food, Beverages and Tobacco” components and Mortgage interest on housing loan from the CPI basket of goods and services.
CORE2 excludes food, beverages, tobacco, mortgage interest, energy prices and administered prices from the CPI basket of goods and services.
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