WPI inflation eases to 5.7% in March 2016, rebounds to 3.7% in 2016-17

Core inflation eases to 2.1% in March 2017

The Wholesale Price Index (WPI)-based inflation dipped to 5.7% in March 2017 from 39-month high of 6.55% in February 2017, while snapping consistent rise for last three straight months. The WPI inflation dipped in March driven by fall in inflation for all three major sub-groups - primary articles, fuel and power group as well as manufactured products group in March 2017.

Inflation of primary articles declined to 4.6% in March 2017 from 5% in February 2017. The inflation for fuel items eased to 18.2% in March 2017 from 21.0% in February 2017. The inflation for manufactured products fell to 3% in March 2017 from 3.7% in February 2017.

The WPI inflation has turned positive at 3.7% in financial year 2016-17 from sub-zero level of (-) 2.5% in 2015-16. The primary articles inflation surged to 4.8% in 2016-17 from 0.3% in 2015-16, while that for fuel products rebounded to 5.6% from (-) 11.7%. The inflation for manufactured products also bounced to 2.6% in 2016-17 from (-) 1.1% in 2015-16.

As per major commodity group-wise, inflation declined for foodgrains, milk, 'egg, meat & fish', spices, oilseeds, raw rubber, flowers, metallic mineral, crude petroleum, mineral oils, grain mill products, sugar, edible oils, tea and coffee products, wine, fertilizers, grey cement, ferrous metal, and metal products in March 2017. On the other hand, inflation of vegetables, fruits, fibres, oil cakes, textiles, paper products, rubber and plastic products, chemical products, and transport equipment and parts increased in March 2017.

Inflation of food items (food articles and food products) declined to 4.4% in March 2017 from 4.8% in February 2017 level. Meanwhile, inflation of non-food items (all commodities excluding food items) also eased to 6.3% in March 2017 from 7.3% in February 2017.

Core inflation (manufactured products excluding foods products) declined to 2.1% in March 2017 from 2.4% in February 2017.

The contribution of primary articles to the overall inflation, at 5.7%, was 131 basis points (bps) in March 2017 compared with 142 bps to 6.55% in February 2017. The contribution of fuel product group was 266 bps against 303 bps in February 2017, while that of manufactured products was lower at 170 bps compared with 209 bps.

The contribution of food items (food articles and food products) to inflation fell to 137 bps in 5.7% in March 2017 compared with 152 bps to 6.55% in February 2017. Meanwhile, the contribution of non-food items (all commodities excluding food items) was 432 bps in March 2017 compared with 501 bps in February 2017.

As per the revised data, the inflation figure for January 2017 was revised up to 5.5% compared with 5.3% reported provisionally.

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