WPI inflation remains flat at (-) 0.9% in February 2016

Core inflation rises to (-) 1.7% in February 2016, after remaining flat for last six months

The Wholesale Price Index (WPI)-based inflation was flat at (-) 0.9% in February 2016 from January 2016, while the inflation figure continued to be in negative zone for sixteenth straight month. The inflation for primary articles has declined, helping to maintain inflation rate steady in February 2016. However, the inflation for fuel products and manufactured products increased in February 2016.

As per the revised data, the inflation figure for December 2015 was revised down to (-) 1.1% compared with (-) 0.7% reported provisionally.

Inflation of primary articles plunged to 1.6% in February 2016 from 4.6% in January 2016, while that for fuel items increased to (-) 6.4% from 9.2%. The inflation for manufactured products also increased to (-) 0.6% in February 2016 from (-) 1.2% in January 2016.

 

As per major commodity group-wise, inflation declined for food grains, vegetables, spices, fish-inland, oilseeds, flowers, crude petroleum, electricity, cement and dairy products in February 2016. On the other hand, inflation increased for milk, fibres, mineral oils, grain mill products, sugar, edible oils, textiles, chemical products, steel, gold & ornaments, and machine tools in February 2016.

Inflation of food items (food articles and food products) declined to 3.7% in February 2016 from 5% in January 2016. Meanwhile, inflation of non-food items (all commodities excluding food items) moved up to (-) 2.9% in February 2016 from (-) 3.4% in January 2016.

Core inflation (manufactured products excluding foods products) increased to (-) 1.7% in February 2016, after remaining flat for last six months.

The contribution of primary articles to the overall inflation, at (-) 0.9%, was 44 basis points (bps) in February 2016 compared with 127 bps in January 2016. The contribution of manufactured products was (-) 33 bps compared with (-) 66 bps, while that of fuel product group was (-) 98 bps against (-) 146 bps in January 2016.

The contribution of food items (food articles and food products) to inflation declined to 111 bps in (-) 0.91% in February 2016 compared with 150 bps to (-) 0.90% in January 2016. Meanwhile, the contribution of non-food items (all commodities excluding food items) was (-) 204 bps in February 2016 compared with (-) 237 bps in January 2016.

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