WPI inflation dips to 5.1% in July 2018

Core inflation remains high at 4.8% in July 2018

The Wholesale Price Index (WPI)-based inflation, base year 2011-12, dipped to 5.1% in July 2018 from a 54-month high of 5.8% in June 2018. The decline in inflation was entirely driven by dip in inflation for primary articles, while the inflation has increased for fuel and power and manufactured products group in July 2018 from June 2018 level. Core inflation (manufactured products excluding foods products) was flat at 4.8% in July 2018.

The WPI inflation is revised upwards to 4.8% in May 2018 from 4.4% reported earlier.

Inflation of primary articles plunged to 1.7% in July 2018 from 5.3% in June 2018, while the inflation for manufactured products moved up to 4.3% in July 2018. Further, the inflation for fuel items accelerated to 18.1% in July 2018 from 16.2% in June 2018.

As per major commodity group-wise, inflation increased for cereals, pulses, milk, egg, fish, spices, fibres, oilseeds, floriculture, mineral oils, grain mill products, sugar, tea products, textile items, chemical products, rubber and plastic products, cement, paper products, machinery and equipment, other transport equipment and motor vehicles. On the other hand, inflation of vegetables, fruits, fodder, metallic minerals, crude petroleum, beverages, tobacco products, wood products, wearing apparel, basic metals, electrical equipment, furniture, gold & gold ornament declined in July 2018.

Inflation of food items (food articles and food products) turned negative to (-) 0.9% in July 2018 from 1.6% in June 2018 level. Meanwhile, inflation of non-food items (all commodities excluding food items) moved up to 7.6% in July 2018 in 7.4% in June 2018.

The contribution of primary articles to the overall inflation of 5.1% dipped to 46 basis points (bps) in July 2018, down from contribution of 134 bps to 5.8% in June 2018. The contribution of fuel product group moved up to 185 bps against 169 bps in June 2018, while that of manufactured products also rose to 271 bps in July 2018 from 268 bps in June 2018.

The contribution of food items (food articles and food products) to inflation turned negative at (-) 26 bps to 5.1% in July 2018 compared with 45 bps to 5.8% in June 2018. Meanwhile, the contribution of non-food items (all commodities excluding food items) rose to 530 bps in July 2018 from 525 bps in June 2018.

The WPI inflation stood at 4.8% in April-July FY2019 against 2.2% in April-July FY2018. The primary articles inflation turned positive to 3.3% in April-July FY2019 from (-) 1.1% in April-July FY2018, while fuel products inflation increased to 13.7% from 9.4%. The inflation for manufactured products rose to 3.9% in April-July FY2019 from 2.5% in April-July FY2018.

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