WPI Inflation accelerates to 2.6% in December 2019

Core WPI inflation rises to (-) 1.5% in December 2019

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, accelerated to 7-months high of 2.6% in December 2019, showing sharp increase from 0.6% in November 2019.

Among the three major sub-groups, the inflation for primary articles and fuel and power increased, while inflation for manufactured products group also moved up in December 2019.

The core inflation (manufactured products excluding foods products) rebounded to (-) 1.5% in December 2019, after consistent moderation for last 13 straight months to (-) 1.9% in November 2019 from 4.9% in October 2018.

The WPI inflation is revised downwards to 0.0% for October 2019 from 0.2% reported at provisional level.

As per major commodity group-wise, inflation increased for mineral oils, vegetables, crude petroleum & natural gas, food products, floriculture, basic metals, metallic minerals, milk, pharmaceuticals, medicinal chemical and botanical products, coal, oil seeds, computer, electronic and optical products, chemicals and chemical products, other non-food articles, machinery and equipment, condiments & spices, fibres, other non-metallic mineral products, other minerals, rubber and plastics products, fabricated metal products, except machinery and equipment etc. On the other hand, inflation of other manufacturing, eggs, meat & fish, electricity, furniture, pulses, fruits, printing and reproduction of recorded media, electrical equipment, wood and of products of wood and cork , other food articles, textiles etc declined in December 2019.

Inflation of primary articles increased to 11.5% in December 2019 from 7.7% in November 2019. The inflation for fuel and power group inflation increased to (-) 1.5% and the manufactured products inflation rose at (-) 0.3% in December 2019.

Inflation of food items (food articles and food products) increased to 72-month high of 11.0% in December 2019 from 9.0% in November 2019 level. Meanwhile, inflation of non-food items (all commodities excluding food items) also jumped to 0.7% in December 2019 from (-) 2.7% in November 2019.

The contribution of primary articles to the overall inflation of 2.59% increased to 289 basis points (bps) in December 2019, from contribution of 195 bps to 0.58% in November 2019. The contribution of fuel product group further increased to (-) 16 bps against (-) 87 bps in November 2019, while that of manufactured products moved up to (-) 16 bps in December 2019 from (-) 53 in November 2019.

The contribution of food items (food articles and food products) to inflation increased to 310 bps to 2.59% in December 2019 compared with 253 bps to 0.58% in November 2019. Meanwhile, the contribution of non-food items (all commodities excluding food items) jumped to (-) 50 bps in December 2019 from (-) 194 bps in November 2019.

The WPI inflation was lower at 1.5% in April-December FY2020 against 4.7% in April-December FY2019. The primary articles inflation moved up to 6.9% in April-December FY2020 from 2.3% in April-December FY2019, while fuel products inflation was negative at (-) 3.1% from 14.6%. The inflation for manufactured products declined to 0.2% in April-December FY2020 from 4.1% in April-December FY2019.

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