Inflation slightly up at 0.1% in December 2014

Core inflation eases to 1.6%, figure for October 2014 revised down to 1.7%

The Wholesale Price Index (WPI)-based inflation rose slightly to 0.1% in December 2014 from a 64-month low of 0% in November 2014. An increase in WPI inflation for December 2014 was mainly contributed by waning of favourable base effect. Infact, the WPI inflation has declined 0.9% in December 2014 over November 2014.

Inflation rebounded for primary articles to 2.2% in December 2014 from sub-zero level of (-) 1% in November 2014. On the other hand, the inflation for fuel and power group plunged to (-) 7.8% in December 2014 from (-) 4.92% in November 2014. Further, inflation for manufactured products also eased to 1.6% from 2%.

As per major commodity group-wise inflation, inflation moved up for vegetables, fruits, raw cotton, copper ore, edible oils, oil cake, tea leaf (blended), cashew kernel, gold and ornaments contributing to the rise in inflation for December 2014.

On the other hand, the inflation eased for foodgrains, fish, poultry chicken, ginger, flowers, crude petroleum, fuel products, electricity, bakery products, dried tobacco, textiles items, paper products, rubber products, chemical products, non-metallic mineral products, basic metals, electrical machinery restricting the overall rise in inflation in December 2014.

Inflation for food items (food articles and food products) increased to 4.1% in December 2014 from 0.8% in November 2014. Meanwhile, inflation for non-food items (all commodities excluding food items) also declined to (-) 1.5% from (-) 0.4%.

Core inflation (manufactured products excluding foods products) eased to 1.6% from 2.2%.

The contribution of primary articles to the overall inflation rebounded to 59 basis points, or bps, to 0.1% inflation in December 2014 from (-) 28 bps to 0% in November 2014. The contribution of the fuel product group dipped to (-) 137 bps) from (-) 85 bps, while that of manufactured products eased to 87 bps from 111 bps.

The contribution of food items (food articles and food products) to inflation increased to 116 bps to 0% from 24 bps in November 2014. On the other hand, the contribution of non-food items (all commodities excluding food items) dipped to (-) 105 bps in December 2014 compared with (-) 24 bps in November 2014.

As per revised data available, inflation for October 2014 was scaled down to 1.7% from 1.8% reported provisionally.

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