WPI inflation dips to 10-month low of 2.8% in January 2019

Core inflation dips to 2.9% in January 2019

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, dipped to 10-month low of 2.8% in January 2019, exhibiting sharp decline for third straight month from 5.5% in October 2018. The inflation declined sharply for fuel and manufactured products group contributing to the dip in overall WPI inflation in January 2019, while the inflation for primary articles accelerated for second straight month. The core inflation (manufactured products excluding foods products) has declined to 2.9% in January 2019.

The WPI inflation is revised downwards to 4.5% for November 2018 from 4.6% reported earlier.

Inflation of primary articles increased to 3.5% in January 2019 from 2.3% in December 2018. The manufactured products inflation dipped to 2.6%, while fuel and power group inflation plunged to 1.8% in January 2019.

As per major commodity group-wise, inflation dipped for mineral oils, basic metals, crude petroleum & natural gas, electricity, chemicals and chemical products, coal, other manufacturing, machinery and equipment, fibres, textiles, fabricated metal products, fruits, printing and reproduction of recorded media, paper and paper products. On the other hand, inflation of wearing apparel, floriculture, eggs, meat & fish, pharmaceuticals, medicinal chemical and botanical products, pulses, food products, metallic minerals, vegetables etc moved up in January 2019.

Inflation of food items (food articles and food products) increased to 1.8% in January 2019 from 0.1% in December 2018 level. Meanwhile, inflation of non-food items (all commodities excluding food items) plunged to 3.1% in January 2019 from 5.3% in December 2018.

The contribution of primary articles to the overall inflation of 2.8% increased to 90 basis points (bps) in January 2019, up from contribution of 59 bps to 3.8% in December 2018. The contribution of fuel product group dipped to 20 bps against 91 bps in December 2018, while that of manufactured products eased to 166 bps in January 2019 from 228 bps in December 2018.

The contribution of food items (food articles and food products) to inflation jumped to 53 bps to 2.8% in January 2019 compared with 02 bps to 3.8% in December 2018. Meanwhile, the contribution of non-food items (all commodities excluding food items) declined to 222 bps in January 2019 from 377 bps in December 2018.

The WPI inflation stood at 4.6% in April-January FY2019 against 3.0% in April-January FY2018. The primary articles inflation moved up to 2.5% in April-January FY2019 from 1.5% in April-January FY2018, while fuel products inflation increased to 13.4% from 8.9%. The inflation for manufactured products rose to 3.9% in April-January FY2019 from 2.7% in April-January FY2018.

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