WPI inflation accelerates to 3.2% in August 2017

Core WPI inflation also rises to 2.6% in August 2017

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, accelerated further higher to 3.2% in August 2017 from 1.9% in July 2017, after rebounding from a 12-month low of 0.9% in June 2017. An increase in WPI inflation was driven by higher inflation for all three major sub-groups - primary articles, fuel products and manufactured products in August 2017. Core inflation (manufactured products excluding foods products) also increased to five months high of 2.6% in August 2017 from 2.1% in July 2017.

Inflation of primary articles surged to 2.7% in August 2017 from 0.5% in July after turning positive from (-) 4.2% in June 2017. The inflation for fuel items more than doubled to 10% in August 2017 from 4.4% in July 2017, while snapping consistent sharp moderation for previous five straight months. The inflation for manufactured products moved up to 2.5% in August 2017 from 2.2% in July 2017.

As per major commodity group-wise, inflation increased for vegetables, fruits, pulses, milk, egg, meat fish, spices, oilseeds, fodder, flouriculture, limestone, mineral oils, tobacco products, beverages, leather products, paper and paper products, printing, basic metals, chemical products, pharmaceutical products, fabricated metal products, electrical equipment, machinery and equipment and motor vehicle in August 2017. On the other hand, inflation of cereals, copper concentrate, electricity, food products, textiles, rubber and plastic products, computer and electronic products, and transport equipment declined in August 2017.

Inflation of food items (food articles and food products) jumped to 4.4% in August 2017 from 2.1 in July 2017 level. Meanwhile, inflation of non-food items (all commodities excluding food items) moved up to 2.7% in August 2017 from 1.8% in July 2017.

The contribution of primary articles to the overall inflation of 3.24%, stood at 71 basis points (bps) in August 2017, showing surge from 12 bps to 1.88% in July 2017. The contribution of fuel product group galloped to 96 bps against 44 bps in July 2017, while that of manufactured products increased to 156 bps compared with 138 bps.

The contribution of food items (food articles and food products) to inflation accelerated to 132 bps to 3.24% in August 2017 compared with 63 bps to 1.88% in July 2017. Meanwhile, the contribution of non-food items (all commodities excluding food items) increased to 192 bps in August 2017 compared with 128 bps in July 2017.

The WPI inflation stood at 2.4% in April-August FY2018 against (-) 0.1% in April-August FY2017. The primary articles inflation was at (-) 0.4% in April-August FY2018 from 4.9% in April-August FY2017, while fuel products inflation increased to 9.5% from (-) 11.6%. The inflation for manufactured products bounced to 2.5% in April-August FY2018 from (-) 0.1% in April-August FY2017.

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