Core inflation accelerates to 3.4% in January 2018
The Wholesale Price Index (WPI)-based inflation, base year 2011-12, dipped to a six-month low of 2.8% in January 2018, while showing decline for second straight month from 3.6% in December 2017 and eight months high of 4% in November 2017. Among the three major components of the WPI index, the inflation for primary articles dipped sharply and fuel & power group inflation more than halved contributing to the decline in overall inflation in January 2018. The inflation for manufactured products group moved up in January 2018. Core inflation (manufactured products excluding foods products) accelerated to 41-months high of 3.4% in January 2018 from 3.1% in December 2017.Inflation of primary articles dipped to 2.4% in January 2018 from 3.9% in December 2017, while the inflation for fuel items plunged to 4.1% in January 2018 from 9.2% in December 2017. However, the inflation for manufactured products rose to 2.8% from 2.6%.
As per major commodity group-wise, inflation declined for vegetables, fruits, fish, chicken, fibres, raw rubber, floriculture, metallic minerals, crude petroleum, coal, mineral oils, electricity, food products, textiles, wearing apparel, pharma products, fabricated metal products, computer and products, machinery & equipment, furniture and jewellery products in January 2018. On the other hand, inflation of cereals, pulses, spices, oilseeds, non-coking coal, paper products, chemical products, other non-metallic mineral products, basic metals and motor vehicles increased in January 2018.
Inflation of food items (food articles and food products) declined to 1.7% in January 2018 from 2.9% in December 2017 level. Meanwhile, inflation of non-food items (all commodities excluding food items) was also declined to 3.3% in January 2018 from 3.9% in December 2017.
The contribution of primary articles to the overall inflation of 2.8% stood at 60 basis points (bps) in January 2018, showing decline from 99 bps to 3.6% in December 2017. The contribution of fuel product group dipped to 44 bps against 95 bps in December 2017, while that of manufactured products increased to 177 bps compared with 167 bps.
The contribution of food items (food articles and food products) to inflation dipped to 48 bps to 2.8% in January 2018 compared with 85 bps to 3.6% in December 2017. Meanwhile, the contribution of non-food items (all commodities excluding food items) also declined to 231 bps in January 2018 compared with 274 bps in December 2017.
The WPI inflation stood at 2.9% in April-January FY2018 against 1% in April-January FY2017. The primary articles inflation eased to 1.5% in April-January FY2018 from 3.4% in April-January FY2017, while fuel products inflation increased to 9% from (-) 4.4%. The inflation for manufactured products jumped to 2.6% in April-January FY2018 from 1% in April-January FY2017.
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