WPI Inflation dips to 39-months low of 0.3% in September 2019

Core WPI inflation plunges to (-) 1.1% in September 2019

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, dipped further down to 39-months low of 0.3% in September 2019 from 1.1% in August 2019. The WPI based inflation has been moderating consistently for last five straight months from 3.2% in April 2019.

Among the three major sub-groups, the inflation for primary articles declined, while inflation for fuel and power further dipped in to sub-zero level and manufactured products groups inflation turned negative contributing to the fall in overall WPI inflation in September 2019. The core inflation (manufactured products excluding foods products) slipped further down into sub-zero level to (-) 1.1% in September 2019.

The WPI inflation is revised slightly upwards to 1.2% for July 2019 similar to 1.1% reported to at provisional level.

As per major commodity group-wise, inflation dipped for mineral oils, fruits, basic metals, crude petroleum & natural gas, floriculture, electricity, chemicals and chemical products, textiles, other manufacturing, other non-food articles, other food articles, other non-metallic mineral products, paper and paper products, rubber and plastics products, furniture, motor vehicles, trailers and semi-trailers etc. On the other hand, inflation of vegetables, food products, metallic minerals, oil seeds, fabricated metal products, except machinery and equipment, pharmaceuticals, medicinal chemical and botanical products, wearing apparel, eggs, meat & fish, machinery and equipment, condiments & spices, coal, pulses, cereals, milk etc increased in September 2019.

Inflation of primary articles declined to 5.5% in September 2019 from 6.4% in August 2019. The inflation for fuel and power group inflation dipped further below sub-zero level to (-) 7.1% and the manufactured products inflation turned negative at (-) 0.4% in September 2019.

Inflation of food items (food articles and food products) increased to 6.0% in September 2019 from 5.8% in August 2019 level. Meanwhile, inflation of non-food items (all commodities excluding food items) dipped to (-) 1.9% in September 2019 from (-) 0.7% in August 2019.

The contribution of primary articles to the overall inflation of 0.33% declined to 140 basis points (bps) in September 2019, from contribution of 164 bps to 1.08% in August 2019. The contribution of fuel product group further declined to (-) 83 bps against (-) 46 bps in August 2019, while that of manufactured products fell to (-) 27 bps in September 2019 from 0 bps in August 2019.

The contribution of food items (food articles and food products) to inflation increased to 167 bps to 0.33% in September 2019 compared with 162 bps to 1.08% in August 2019. Meanwhile, the contribution of non-food items (all commodities excluding food items) dipped to (-) 134 bps in September 2019 from (-) 50 bps in August 2019.

The WPI inflation fell to 1.8% in April-September FY2020 against 4.9% in April-September FY2019. The primary articles inflation moved up to 6.2% in April-September FY2020 from 2.7% in April-September FY2019, while fuel products inflation tumbled to (-) 1.9% from 15.0%. The inflation for manufactured products dipped to 0.7% in April-September FY2020 from 4.1% in April-September FY2019.

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