The key consumer price index remained flat in February from the same period a year ago as energy costs declined while some food prices rose, the government said Friday.
The core nationwide consumer price index, which excludes volatile fresh food prices, stayed unchanged from the year-before level for the second straight month, standing at 100.4 against the base of 100 for 2005, the Ministry of Internal Affairs and Communications said in a preliminary report.
The result added to the view that the economy is still on the verge of deflation.
Many analysts said the core CPI will log negative growth starting in March.
“Deflationary pressures have been growing on the back of slides in natural resource prices and the slowing economy,” said Takahide Kiuchi, chief economist at Nomura Securities Co.
Finance Minister Kaoru Yosano attempted Friday to shrug off such a negative view, saying, “It is too early to say the economy has been in deflation.”
Energy prices as a whole dropped 7.3 percent in the reporting month. But they fell more slowly than the 8.2 percent decline in January.
Gasoline prices were down 27.7 percent, also showing a slower rate of decline than the 30.9 percent decrease the previous month. On a month-on-month basis, gasoline prices were up 3.4 percent.
Prices of petroleum products, including gasoline, fell 21.5 percent on year against the 23.4 percent loss in January.
Prices of nonperishable foods, including cheese, wheat flour and instant noodles, gained 3.3 percent.
Airplane fares rose 7.7 percent while automobile insurance costs fell 26.6 percent. Expressway tolls were down 3.3 percent.
With fresh food prices taken into account, the February CPI fell 0.1 point, the first decline since September 2007, with the index standing at 100.4.
Excluding food and energy prices, the index lost 0.1 point to 98.5, falling for the second straight month. The indicator is seen as similar to the core consumer price index in the United States, with some experts saying it better reflects price trends.
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