WPI inflation rebounds to 1.88% in July 2017

Core inflation rises marginally to 2.1% in July 2017

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, increased to 1.9% in July 2017 rebounding from 12-month low of 0.9% in June 2017, while snapping consistent sharp moderation for last four straight months. The WPI inflation was driven up by inflation primary articles turning positive in July 2017, while the inflation for fuel and power group as well as manufactured products group have decline in June 2017.

Inflation of primary articles rebounded to 0.5% in July 2017 from (-) 3.9% in June 2017. The inflation for fuel items dipped to 4.4% in July 2017, continuing sharp moderation for fifth straight month, from 5.3% in June 2017. The inflation for manufactured products also fell to 2.2% in July 2017 from 2.3% in June 2017.

 

As per major commodity group-wise, inflation increased sharply vegetables, fruits, egg, meat fish, spices, fodder, flouriculture, copper concentrate, tobacco products, wearing apparel, paper and paper products, basic metals, computer and electronic products, machinery and equipment, transport equipment and furniture in July 2017. On the other hand, inflation of foodgrains, milk, fibres, oilseeds, crude petroleum, mineral oil, food products, textiles, chemical products, rubber and plastic products, electrical equipment, motor vehicles declined in July 2017.

Inflation of food items (food articles and food products) rebounded to 2.1% in July 2017 from (-) 1.2% in June 2017 level. Meanwhile, inflation of non-food items (all commodities excluding food items) was flat at 1.8% in July 2017 compared with that in June 2017.

Core inflation (manufactured products excluding foods products) rose marginally to 2.1% in July 2017 from 2.0% in June 2017.

The contribution of primary articles to the overall inflation, at 1.88%, was positive 12 basis points (bps) in July 2017, showing rebound from (-) 103 bps to 0.90% in June 2017. The contribution of fuel product group eased to 44 bps against 53 bps in June 2017, while that of manufactured products was lower at 133 bps compared with 144 bps.

The contribution of food items (food articles and food products) to inflation turned positive at 63 bps to 1.88% in July 2017 compared with (-) 37 bps to 0.90% in June 2017. Meanwhile, the contribution of non-food items (all commodities excluding food items) was nearly flat at 128 bps in July 2017 compared with 125 bps in June 2017.

The WPI inflation stood at 2.2% in April-July FY2018 against (-) 0.4% in April-July FY2017. The primary articles inflation was at (-) 1.0% in April-July FY2018 from 5.0% in April-July FY2017, while fuel products inflation increased to 9.5% from (-) 12.6%. The inflation for manufactured products bounced to 2.5% in April-July FY2018 from (-) 0.3% in April-July FY2017.

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