WPI inflation declines to 3.6% in December 2017

Core inflation nearly flat at 3.1% in December 2017

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, eased to three-month low of 3.6% in December 2017 from 3.9% in November 2017, while snapping increase for last two straight months. Among the three major components of the WPI index, the inflation for primary articles dipped entirely contributing to the decline in overall inflation in December 2017. The inflation for manufactured products group was stable and that for fuel products moved up in December 2017. Core inflation (manufactured products excluding foods products) was nearly flat at 3.1% in December 2017.

Inflation of primary articles dipped to 3.9% in December 2017 from 5.3% in November 2017. The inflation for manufactured products was flat at 2.6%, while the inflation for fuel items rose to 9.2% in December 2017 from 8.8% in November 2017.

As per major commodity group-wise, inflation declined for cereals, vegetables, egg, fish, chicken, fodder, metallic minerals, crude petroleum, electricity, food products, tobacco products, textiles, wood products, fabricated metal products, electrical equipment, machinery & equipment and other transport equipment in December 2017. On the other hand, inflation of pulses, fruits, spices, fibres, floriculture, coal, mineral oils, leather products, paper products, chemical products, pharma products, other non-metallic products, computer products, basic metals and gold ornament increased in December 2017.

Inflation of food items (food articles and food products) declined to 2.9% in December 2017 from 4.1% in November 2017 level. Meanwhile, inflation of non-food items (all commodities excluding food items) was flat at 3.9% in December 2017 from in November 2017.

The contribution of primary articles to the overall inflation of 3.6% stood at 99 basis points (bps) in December 2017, showing declined from 137 bps to 3.9% in November 2017. The contribution of fuel product group rose to 95 bps against 91 bps in November 2017, while that of manufactured products notched up to 167 bps compared with 166 bps.

The contribution of food items (food articles and food products) to inflation dipped to 85 bps to 3.6% in December 2017 compared with 122 bps to 3.9% in November 2017. Meanwhile, the contribution of non-food items (all commodities excluding food items) notched up to 274 bps in December 2017 compared with 273 bps in November 2017.

The WPI inflation stood at 2.9% in April-December FY2018 against 0.7% in April-December FY2017. The primary articles inflation eased to 1.3% in April-December FY2018 from 3.5% in April-December FY2017, while fuel products inflation increased to 9.7% from (-) 6.5%. The inflation for manufactured products jumped to 2.6% in April-December FY2018 from 0.7% in April-December FY2017.

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