WPI inflation declines to 3.57% in September 2016

WPI inflation declines after rising consistently for last 12 straight months

The Wholesale Price Index (WPI)-based inflation eased to 3.57% in September 2016 from two-year high of 3.7% in August 2016. The WPI inflation also eased after rising consistently for last 12 sequential months. However, the decline in WPI inflation was mainly driven by sharp dip in inflation for primary articles, while inflation for fuel & power and manufactured products group moved up in September 2016. Further, the unfavourable base effect restricted sharp decline in inflation in September 2016.

Inflation of primary articles dipped to 4.8% in September 2016 from 7.5% in August 2016. The inflation for manufactured products rose to 2.5% in September 2016. Further, the inflation for fuel items which turned positive after 21-months of deflation to 1.6% in August 2016 accelerated to 5.6% in September 2016,

 

As per major commodity group-wise, inflation eased for foodgrains, vegetables, fish, mutton, poultry chicken, spices, fibres, oilseeds, raw rubber, flowers, copper ore, crude petroleum, sugar, oil cakes, paper & products, leather product, chemical products, and non-metallic mineral products in September 2016. On the other hand, inflation rose for fruits, milk, mineral oils, grain mill products, bakery products, edible oils, textiles, wood & wood products, rubber & plastic products, and basic metals in September 2016.

Inflation of food items (food articles and food products) eased to 7.5% in September 2016 from 9.2% in August 2016. Meanwhile, inflation of non-food items (all commodities excluding food items) moved up to 1.8% in September 2016 from 1.3% in August 2016.

Core inflation (manufactured products excluding foods products) rose to 0.6% in September 2016, from 0.5% in August 2016.

The contribution of primary articles to the overall inflation, at 3.57%, was 137 basis points (bps) in September 2016 compared with 213 bps in August 2016. The contribution of manufactured products was 140 bps compared with 136 bps, while that of fuel product group was 83 bps against 24 bps in August 2016.

The contribution of food items (food articles and food products) to inflation fell to 233 bps in 3.57% in September 2016 compared with 286 bps to 3.74% in August 2016. Meanwhile, the contribution of non-food items (all commodities excluding food items) was 126 bps in September 2016 compared with 126 bps in August 2016.

As per the revised data, the inflation figure for July 2016 was revised up to 3.7% compared with 3.5% reported provisionally.

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