Headline inflation records slight moderation in February. Data from the National Bureau of Statistics (NBS) indicated that headline inflation moderated slightly in February, easing by 4 basis points (bps) to 15.1% year-on-year (y/y). This marginal deceleration was largely underpinned by a continued slowdown in core inflation, which declined to 15.9% y/y from 17.7% y/y in January.

We attribute this moderation primarily to improving macroeconomic conditions during the period, particularly the relative stability in the foreign exchange market. Notably, the local currency appreciated by approximately 4.5% month-on-month (m/m) in February, helping to ease imported inflation pressures and dampen pass-through effects on domestic prices. In addition, there was a notable softening in price dynamics across key service-related components of the inflation basket.

For instance, housing and utilities inflation contracted by 0.4% m/m in February, a stark contrast to the 0.5% increase in the prior month. Meanwhile, food inflation recorded a marked acceleration, rising to 12.1% y/y in February from 8.9% y/y in the previous month. On a monthly basis, food prices increased sharply by 4.7% in February, representing a significant turnaround from the 6.0% contraction recorded in January.

We attribute this increase primarily to tighter supply conditions linked to the ongoing planting season, alongside demand-supply disruptions associated with the Ramadan fasting period, and lingering security issues in the agrarian region. We believe that the resurgence in food inflation was the key driver of the rebound in monthly headline inflation, which rose by 2.0% m/m in February, a notable shift from the 2.9% m/m decline observed in January.

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​​​CSL Economics Report – February 2026 Inflation.pdf